AIMS APAC REIT Acquires Prime City-Fringe Industrial Property in Singapore: 8.1% NPI Yield and DPU Upside for Unitholders

Key Highlights for Retail Investors

• Strategic Acquisition: AIMS APAC REIT (AA REIT) is acquiring Framework Building at 2 Aljunied Avenue 1, Singapore, for a total consideration of S\$56.65 million.
• Attractive Financials: The deal offers an initial Net Property Income (NPI) yield of 8.1% and is projected to deliver a 2.5% distribution per unit (DPU) accretion for unitholders if fully debt-funded.
• Near Full Occupancy: The property is 97% occupied and anchored by Framework Building Products Pte Ltd, with a weighted average lease expiry (WALE) of 4.1 years as of 29 August 2025.
• Future Value-Add Potential: Flexible configurations and high contracted power capacity make the property suitable for high-specification users, especially in sectors like healthcare, life sciences, and advanced manufacturing.
• Rental Escalations: In-built annual rental escalations under the anchor lease support ongoing revenue growth.
• Location Advantage: The property is in a prime city-fringe location—close to Paya Lebar commercial and retail hub, five minutes from the Pan Island Expressway, and within ten minutes’ walk to Paya Lebar MRT Interchange.
• Portfolio Impact: Post-acquisition, AA REIT’s industrial exposure increases from 20.6% to 22.7%, while portfolio occupancy rises from 93.7% to 93.9%.
• Exposure to Essential Industries: The proportion of the portfolio supporting resilient and essential industries rises from 82.3% to 82.8%.
• Proforma Funding: If the acquisition is funded using part of the 2023 equity fund raising and debt, DPU accretion is estimated at 0.5%.
• Rental Guarantee: The vendor provides a 3-year rental guarantee on the vacant area (3% of GFA), ensuring full income generation from Day 1.

Detailed Breakdown: What Shareholders Must Know

Deal Structure and Financial Impact

AA REIT, managed by AIMS APAC REIT Management Limited, has secured an option agreement to acquire the Framework Building from Framework Building Products Pte Ltd. The S\$56.65 million consideration includes a S\$45.75 million purchase price and up to S\$10.90 million in JTC Corporation upfront land premium.

The purchase will be funded through a mix of debt and proceeds from AA REIT’s 2023 equity fund raising. If the acquisition is 100% debt-funded, unitholders can expect a substantial 2.5% DPU accretion. If a combination of S\$36.2 million equity and S\$24.18 million debt is used, the proforma DPU accretion is approximately 0.5%.

CEO Russell Ng emphasizes that this acquisition is a “strategic addition” to AA REIT’s portfolio, boosting immediate returns and longer-term resilience by diversifying tenants and enhancing exposure to stable, essential industries.

Property and Tenant Details

• Composition: The asset includes two buildings—one built in 1993 (refurbished 2008), the other completed in 2014.
• Size: Land area is 7,481.7 sqm, with a total net lettable area of 16,082.4 sqm and a gross floor area of 18,662.13 sqm.
• Occupancy: 97% let, with the balance 3% covered by a rental guarantee for three years.
• Anchor Tenant: Framework Building Products Pte Ltd, which will lease back 70% of the GFA for the first five years.
• WALE: The property features a weighted average lease expiry of 4.1 years, providing income stability and visibility.

Strategic and Growth Considerations

• City-Fringe Potential: The property is in a tightly held market near Paya Lebar MRT and multiple expressways, making it highly accessible and attractive for premium tenants.
• High-Spec User Suitability: Configuration and electrical capacity support tenants in growth sectors like advanced manufacturing and life sciences—areas that command higher rents in this location.
• Value-Add Opportunity: Management identifies potential for asset enhancement initiatives (AEI) and repositioning to unlock further value and rental upside.

Portfolio Implications

• Post-acquisition, AA REIT will own 28 properties (up from 27), with 24 in Singapore and 4 in Australia.
• The acquisition solidifies AA REIT’s position in resilient industrial and essential sectors, supporting sustainable, long-term unitholder returns.

Management Commentary

Chairman George Wang and CEO Russell Ng underscored that this deal is firmly in line with AA REIT’s core strategy: acquiring high-quality, income-generating assets and enhancing portfolio resilience in both Singapore and Australia. Management is confident in the property’s immediate accretive impact and longer-term growth prospects, even as macroeconomic conditions remain uncertain.

What Could Move the Share Price?

• This is a price-sensitive announcement. The DPU accretion (especially the 2.5% figure if debt-funded) and high NPI yield may attract retail and institutional investors seeking steady returns, potentially driving up demand for AA REIT units.
• The acquisition highlights AA REIT’s balance sheet strength and management discipline, further bolstering investor confidence.
• Exposure to growth sectors and city-fringe real estate, along with value-add and AEI opportunities, could support a positive re-rating of the REIT’s share price as the market absorbs the news.

About AA REIT and AIMS Financial Group

AIMS APAC REIT is a diversified industrial REIT listed on SGX since 2007, with a focus on quality, income-generating assets across Singapore and Australia. Its sponsor, AIMS Financial Group, is a cross-border financial services and investment group with a pan-Asian presence and a track record in funds management, property investment, and mortgage lending.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. The performance and value of units in AIMS APAC REIT may fluctuate, and past performance is not indicative of future results. Investors should consult their own financial advisers and consider their own investment objectives and risk tolerance before making any investment decision. All forward-looking statements are subject to risks and uncertainties.

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