AIMS APAC REIT FY2026: DPU Up 2.6% to 9.850 Cents, Leverage Cut to 26.8%, Non-Core Divested at a 32.5% Premium — and Two NSW Assets Now Carry Data-Centre Optionality

AIMS APAC REIT (AA REIT, SGX: O5RU) closed its financial year ended 31 March 2026 (FY2026) with distribution per unit (DPU) up 2.6% to 9.850 Singapore cents, net property income (NPI) up 5.7% to S$141.3 million, and aggregate leverage cut to 26.8%. The headline numbers are solid but unspectacular; the more interesting story is what the Manager did with the portfolio — a year of disciplined capital recycling, two re-leased asset enhancements, and a build-up of data-centre optionality in Australia.

Reported on 22 June 2026, AA REIT’s FY2026 results show gross revenue up 2.2% to S$190.7 million, NPI up 5.7% to S$141.3 million, and distributions to unitholders up 3.1% to S$80.6 million. Net asset value (NAV) per unit rose to S$1.28, assets under management (AUM) grew 5.9% to S$2.25 billion, and the industrial-and-logistics trust now holds 28 properties — 25 in Singapore and three in Australia. Chairman George Wang framed the year as the work of ‘a patient, long-term investor’; chief executive Russell Ng called it ‘a year of resilient performance’.

Earnings: a steady top line, a faster bottom line

Revenue grew in the low single digits, but NPI grew almost six percent — margin expansion that came from completed asset enhancement initiatives (AEIs) and disciplined cost control rather than from rent growth alone. AA REIT achieved a full-year rental reversion of 7.7%, signing 33 new and 65 renewal leases across roughly 2.3 million square feet, or 27.4% of total net lettable area. Portfolio weighted average lease expiry (WALE) stood at 4.0 years, giving the income base solid visibility. With more than 180 tenants concentrated in defensive sectors — over 80% of gross rental income comes from resilient industries — the earnings quality is the strongest part of the result.

Capital recycling at a premium

This was the year’s defining theme. AA REIT divested 3 Toh Tuck Link on 17 June 2025 for S$24.4 million, a 32.5% premium to valuation, and — post year-end — completed the divestment of 8 Senoko South Road on 16 April 2026 for S$15.0 million, an 11.1% premium. Both were non-core assets sold above carrying value, with proceeds earmarked for redeployment. On the buy side, the Manager acquired 2 Aljunied Avenue 1 in November 2025, a strategically located city-fringe industrial asset carried at S$61.6 million as at 31 March 2026, whose high contracted power capacity makes it suitable for higher-specification occupiers in healthcare, life sciences and advanced manufacturing — a deliberate tilt toward power-rich, repositionable space.

Alongside the deals, AA REIT completed two AEIs and underwrote them with long leases: a new 15-year master lease with a New York Stock Exchange-listed global storage and information-management firm at 7 Clementi Loop, and a new 10-year anchor lease with a Temasek-linked precision-engineering group at 15 Tai Seng Drive. Those leases convert capital spending into durable, contracted income — the validation the rejuvenation strategy needed.

Balance sheet: deleveraging into cheaper capital

Aggregate leverage fell from 28.9% to 26.8%, near the lower end of the S-REIT range and a clear source of acquisition headroom. AA REIT issued two subordinated perpetual securities at the start of 2026 — S$150 million at 4.10% in January and S$100 million at 4.25% in March — timed, the Manager noted, ahead of policy shifts and geopolitical developments. The proceeds part-refinance an existing S$250 million perpetual security carrying a 5.375% coupon due 1 September 2026; the swap is expected to crystallise around S$3 million in annual savings at a blended rate of about 4.16%. All-in cost of debt sits near 4.1% with 80% of debt hedged, weighted average debt maturity of 2.2 years, an interest coverage ratio (ICR) of 2.7 times, and roughly S$263.4 million of undrawn facilities and cash for liquidity.

Australia: the optionality the market is not yet paying for

AA REIT’s three Australian master-tenanted assets, in Sydney and on the Gold Coast, contribute 23.5% of gross rental income — an outsized share from a small asset count. The forward story is conversion. In March 2026, two of AA REIT’s New South Wales assets, at Macquarie Park and Bella Vista, were among 15 data-centre projects endorsed by the New South Wales Government’s Investment Delivery Authority, a programme valued at A$51.9 billion collectively. The Manager has set out a three-lever data-centre strategy: maximising the redevelopment or conversion potential of existing assets, selectively acquiring land-rich sites near critical infrastructure, and partnering with institutional operators. Its 49.0% interest in Optus Centre at Macquarie Park, which carries a 5.5-star NABERS rating, anchors the platform.

The soft spot: occupancy

The one number that sits below trend is occupancy. Portfolio occupancy held at 93.6% as at 31 March 2026 — resilient, but short of the near-full level AA REIT has historically run. Including committed leases, occupancy rises to 96.8%, which is the figure to watch: the gap between physical and committed is the conversion the next two quarters must deliver. With WALE at 4.0 years and a defensive tenant base, the risk is timing rather than structural, but it is the cleanest stick the bears have.

The read

FY2026 is the picture of a patient industrial landlord doing the unglamorous work well: selling non-core at premiums, buying power and optionality, terming out leases, and deleveraging into cheaper capital. Sponsor AIMS Financial Group held an 18.87% stake as at 31 March 2026, keeping interests aligned. Management is ‘cautiously optimistic’ on FY2027, leaning on supply-chain reconfiguration, advanced manufacturing and the data-centre theme. The investment case is a deleveraged book with embedded redevelopment optionality and contracted income; the swing factor is whether the committed-lease pipeline converts and whether the New South Wales data-centre endorsement turns into an actual conversion. Watch the physical-occupancy print and the first concrete data-centre decision in New South Wales — those are the leading indicators that re-rate this book.

Source: AIMS APAC REIT Annual Report 2026, FY2026 results materials and SGXNET announcements (including the Completion of Divestment of 3 Toh Tuck Link dated 17 June 2025, the Completion of Divestment of 8 Senoko South Road dated 16 April 2026, and the Completion of Acquisition of 2 Aljunied Avenue 1 dated 20 November 2025). PropertyAtlas.sg analysis with TKRE Research.