AIMS APAC REIT Announces S\$150 Million 4.10% Perpetual Securities Issue

Key Highlights and Investor Considerations

AIMS APAC REIT Management Limited, acting as the manager of AIMS APAC REIT (“AA REIT”), has announced the pricing of a significant new fundraising initiative. The trust’s trustee, HSBC Institutional Trust Services (Singapore) Limited, is set to issue S\$150 million of 4.10% perpetual securities (Series 005) under its S\$750 million Multicurrency Debt Issuance Programme. The new securities are scheduled to be issued on 21 January 2026, with listing and quotation on the Singapore Exchange Securities Trading Limited (“SGX-ST”) to follow.

Detailed Terms of the Series 005 Perpetual Securities

• Issue Size: S\$150 million
• Issue Price: 100% of principal amount
• Status: Direct, unconditional, subordinated, unsecured obligations; ranking pari passu with parity obligations
• Maturity: Perpetual, with no fixed final redemption date
• Distribution Rate:
  • First 5 years: 4.10% per annum (from 21 Jan 2026 to 21 Jan 2031)
  • After 5 years: Reset every 5 years to the 5-year SORA OIS plus an initial spread of 2.220%
• Redemption Options:
  • Issuer may redeem all (not some) securities on the first reset date or any distribution payment date thereafter, at par plus accrued distribution
  • Additional redemption events include taxation, accounting, minimal outstanding amount, tax deductibility, and regulatory events
• Optional Payment and Non-Cumulative Deferral:
  • Issuer can elect not to pay, or to pay only part of, any scheduled distribution
  • Deferred distributions are non-cumulative and will not accrue interest; Issuer is never obliged to pay missed distributions
  • Partial payments will be shared among all securityholders
• Restrictions Upon Non-Payment:
  • If distributions are not paid, neither AA REIT nor its subsidiaries can pay dividends, make other payments on junior obligations, or redeem/cancel/buy-back such instruments, except in connection with employee benefit plans or conversions, until all distributions are paid or redemption occurs
• Redemption Price: At par (100%)

Use of Proceeds

The net proceeds will be used for:

1. Refinancing existing borrowings of the Group
2. Financing capital expenditure, general working capital, investments, and acquisition of investment properties
3. Potential refinancing of the existing S\$250 million fixed rate subordinated perpetual securities (ISIN: SGXF10875296)

Potential Price-Sensitive and Shareholder-Relevant Issues

• Impact on Capital Structure:
  • This perpetual issue strengthens AA REIT’s capital base, potentially allowing for further growth, acquisitions, and refinancing at attractive terms.
• Distribution Deferral:
  • The non-cumulative nature of deferred distributions and the issuer’s right to skip distributions may affect investor appetite and yield profile of the securities. Shareholders should note that missed distributions do not accumulate and do not create a future liability for the REIT.
• Reset Terms:
  • The 5-year reset to SORA OIS plus 2.220% exposes holders to interest rate risk after the first 5 years, which could affect the relative attractiveness of the securities depending on future market rates.
• Redemption Flexibility:
  • The REIT’s option to redeem on reset dates or when triggered by certain events provides flexibility but also introduces reinvestment risk for investors.
• Restrictions on Dividends and Buybacks:
  • If distributions are deferred, the REIT and its subsidiaries are restricted from paying dividends or conducting share buybacks, which could affect ordinary unitholders indirectly if the REIT faces financial stress.
• Use of Proceeds for Growth:
  • Funds may be used to refinance debt, invest in new properties, or fund acquisitions, potentially enhancing long-term shareholder value and supporting future growth.

Background on AIMS APAC REIT and Sponsor

AA REIT owns 28 properties (25 in Singapore, 3 in Australia) focusing on industrial, logistics, and business park assets. The trust is part of several major indices and is managed by AIMS Financial Group, an established financial services group with a presence across Australia, China, Hong Kong, and Singapore. This strong sponsor backing may enhance investor confidence in the REIT.

Conclusion

The proposed issue of S\$150 million perpetual securities represents a significant capital markets transaction for AA REIT, impacting its capital structure, growth capacity, and distribution policy. The terms provide flexibility to the issuer but also introduce unique risks and features for investors. Shareholders and prospective investors should closely monitor subsequent announcements, especially with regard to the use of proceeds and any impact on REIT distributions or growth initiatives.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. The value of units in AIMS APAC REIT and the income derived from them may fall as well as rise. Investors should conduct their own due diligence and consult their financial advisors before making any investment decisions. Past performance is not indicative of future results. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially.

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