Balance sheet well-positioned for next growth phase
- Rental reversions continued strong at +33.7% in 1H FYE Mar 24
- Gearing improved following recent divestment, providing AAREIT with ample headroom for AEIs and acquisitions
- Planned AEIs/redevelopments progressing well; work expected to commence in FY25
- Maintain BUY with a TP of S$1.60
Strong double-digits positive 2Q24 rental reversions. AAREIT continues to demonstrate impressive performance with strong double-digit positive rental reversions, marking a remarkable +33.7% increase in 2Q24. This robust performance was primarily driven by the outstanding performance from the logistics and warehouse segment, which saw a +33.9% increase, while the industrial segment maintained healthy positive reversions at +7.3%. These strong rental reversions in the first two quarters of the financial year contributed to an overall positive rental reversion of +37.7% for 1H24.
Looking ahead, with most lease expiries in FY24F coming from the logistics and warehouse segment (representing 10.6% of 13.0%), we anticipate AAREIT will continue to report healthy positive rental reversions due to the ongoing strong growth in rents. Furthermore, the portfolio’s occupancy rate remains stable quarter-on-quarter at 98.1%.
