AREIT is among the largest REIT in Singapore by market cap (S$12.5bn), second only to CapitaLand Integrated Commercial Trust (S$13.4bn market cap) It is Singapore’s largest industrial REIT with investments spanning from business parks to industrial facilities. Its assets include 220 properties in Singapore, US, Australia and in the UK. As at end 2020, the REIT had S$15bn in assets. It completed S$973mn of acquisitions in FY2020 and plans an additional S$535mn worth of investments over the next two years.
Still huge expansion potential. AREIT’s gearing of 37% is well below the 50% regulatory limit, giving the REIT more than S$4bn of acquisition debt headroom. This is important for REITs who can capitalise on size and scale to achieve better DPU vs smaller sized peers, while simultaneously offering diversification within their portfolio.
The trend is your friend. Despite the pandemic,AREIT achieved 3.7% positive rental reversion in 3Q21, driven by healthy demand in business space, high-specification industrial buildings & data centres and logistics and distribution centres. Singapore’s economy is forecasted to expand by 7% in 2021 and grow by another 3-5% in 2022, according to official forecasts by the Ministry of Trade and Industry.
Attractive yields and consensus estimates. offers a dividend yield of 5.3%/5.6%/5.8% for FY 2021/22/23F, according to Bloomberg consensus forecasts. Consensus has a target price of S$3.48 compared to its current unit price of S$2.96.
