Towards Financial Freedom
AAREIT - Set To Grow
AAREIT reported a DPU of 2.50 cents (flat y-o-y) for 1QFY14, in line with our FY13 forecast. 1QFY14 revenue jumped 17.1% y-o-y to SGD24.5m while net property income rose 5.7% y-o-y to SGD15.7m. In view of the exciting pipeline of upcoming projects in the next 17 months, we remain positive on the REIT's outlook. Maintain BUY, with a higher SGD1.81 TP.
- Stellar quarter but DPU diluted due to recent placement. AIMS AMP Capital (AAREIT) posted strong 1QFY14 results, mainly attributed to additional rental contribution from Phase One of 20 Gul Way as the property starting earning income from 29 Dec 2012. Other factors are higher rental rates (c.14.2% higher than the expired leases) and the recovery of 27 Penjuru Lane and 8 & 10 Pandan Crescent, which reverted to multi-tenancy properties. Although the quarter's showing was commendable, AAREIT saw its distribution per unit (DPU) diluted as a result of the recent SGD110m it raised via a placement in April.
- DPU boost in FY14/FY15 from completed projects. During the quarter under review, the REIT received its temporary occupation permit for Phase Two of 20 Gul Way, about seven months ahead of schedule and within budget. As a result of the early completion, we expect rental payments for FY14 to commence this month (c. SGD1.1m) and boost the next quarter's earnings. In addition, with the expected completion of 103 Defu Lane and the extension of Phase 2 at 20 Gul Way by mid-2014, together with the scheduled completion of the property's Phase 3 in 4QFY15, we expect to see robust DPU growth in FY14/FY15.
- Maintain BUY, with higher TP of SGD1.81. In view of AAREIT's: i) robust pipeline of projects due to be completed over the next 17 months, ii) low gearing of 25.4%, iii) available assets to be acquired from its sponsors in Australia, and iv) better-than-expected rental reversion, we believe the REIT is well-positioned to experience respectable growth over the next few years. Maintain BUY, with a slightly higher DDM-based (COE: 8.7%; TGR: 2.0%)TP of SGD1.81.
Source: OSK
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
More articles on Towards Financial Freedom
Duty Free International Ltd. - A duty-free giant in the making
Created by kiasutrader | Oct 17, 2016
Cityneon Holdings - 'Avengers' showcasing in the Land Down Under
Created by kiasutrader | Jun 07, 2016
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
New Update. Discover investment communities that resonate with your ideas
Trade Confidently & Analyze Charts Conveniently - Download VCPlus IOS & Android App Now!
Latest Videos
Apps
Top Articles
1
RHB Investment Research Reports
United Overseas Bank - 2025 Shaping Up to be An Interesting Year
2
RHB Investment Research Reports
OCBC Bank - More Patience Needed on Capital Management Plans
3
SGX Market Updates
SIA Engineering Resumes Buybacks After Reporting H1 FY2025 Results
4
THE SINGAPOREAN INVESTOR
DBS, UOB, or OCBC - Which Bank Had the Best Performance for Q3 and 9M FY2024?
5
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
