AIMS APAC REIT (AA REIT) reported a year-on-year increase of 1.6% in distributions to unitholders, amounting to $38.6 million, and a 1.1% rise in distribution per unit (DPU) to 4.720 Singapore cents for the first half of fiscal year 2026 (1HFY2026), covering the six months ending in September.

In 1HFY2026, gross revenue experienced a 0.2% year-on-year growth to $93.7 million, while Net Property Income (NPI) saw a 1.1% year-on-year increase to $68.4 million, driven by strong operational performance and rental growth within the portfolio.

During this period, the REIT executed 11 new leases and 36 lease renewals, covering a total of 97,175 square meters. This represented 12.6% of the portfolio’s net lettable area (NLA), with a positive rental reversion of 7.7% recorded.

As of the end of September, the portfolio occupancy rate stood at 93.3%, and the weighted average lease expiry was 4.2 years. Essential and defensive industries contributed 82.5% of the gross rental income (GRI), with 76.3% of the GRI derived from Singapore-based assets, and the remaining from high-quality, long-term leases in Australia.

Notably, in 1HFY2026, the Asset Enhancement Initiative (AEI) at 7 Clementi Loop was completed, and the manager secured a 15-year master lease with a global storage and information management firm.

Additionally, on August 29, the manager announced the proposed acquisition of a Singapore industrial property located in a strategic city-fringe location for $56.65 million. This asset at 2 Aljunied Avenue 1 is expected to yield an attractive NPI of 8.1% and DPU accretion of 2.5%.

By September 30, AA REIT’s aggregate leverage was 35%, with no debt refinancing due until FY2027. The weighted average debt maturity stood at 2.5 years, and the interest coverage ratio was 2.5 times. The blended debt funding cost decreased to 4.2%, down from 4.4% a year ago. Moreover, 70% of the debt is fixed-rate with less than one year of fixed debt maturity remaining, potentially benefiting from reductions in floating interest rates. The manager also hedges 75% of its estimated Australian dollar distributable income into Singapore dollars on a rolling four-quarter basis, mitigating foreign exchange rate volatility.

Based on the closing price on November 4, the annualized DPU yield is 6.84%.