AIMS APAC REIT (AAREIT) is an industrial REIT with properties spanning across the Asia-Pacific region. Its portfolio consists of 28 properties, with 25 in Singapore and 3 in Australia. The portfolio has a total value of S$2.2 billion as of 31 December 2025.
AAREIT (through its trustee) plans to issue new SGD NC5.5 perpetuals at an initial price guidance (IPG) of 4.450% for accredited and institutional investors only. These perpetuals come with reset dates at the end of 9 September 2031 and every 5 years thereafter, based on the prevailing SGD 5Y SORA-OIS (1.65% as of 26 February 2026) and an estimated initial spread of 2.80%.
The bonds are expected to be unrated, while the issuer is also unrated. Net proceeds will be used to refinance the issuer’s existing perpetuals (AAREIT 5.375% Perpetual Corp (SGD)) and for general working capital and capital expenditure requirements.
We recently covered AAREIT’s January 2026 AAREIT perpetual issue here: New Issue: 4.4% yields (IPG) offered by SGX-listed logistics specialist
Operational highlights:
Portfolio occupancy strengthened to 95.4% in 9M2026 (compared to 94.5% in 9M2025). This improvement is due to the strengthening of the Singapore portfolio’s occupancy rate to 94.6% (92.3% on 30 September 2025), while the Australia portfolio maintains its perfect 100% occupancy. In summary, we think these occupancy rates showcase AAREIT’s portfolio of high-quality assets.
Financial Highlights:
As this is just a business update, the logistics specialist did not provide a breakdown of NPI contributors. Instead, we highlight that most of the gross rental income (76.4%) comes from the Singapore portfolio, with logistics (47.7%), industrial (20.9%), and Business Park (24.6%) leading. Nevertheless, we believe AAREIT's profitability should be well-maintained, especially given the completion of its accretive acquisition of the Framework building and the earnings contribution from its property in Clementi Loop (where its renovation works have been completed).
Looking ahead, management expects positive operating tailwinds from both Singapore and Australia, led by stable industrial growth. Furthermore, after the January 2026 issuance of S$150 million in perpetuals, management is on the lookout for new potential accretive acquisitions to strengthen the REIT’s growth profile.
In conclusion, we continue to like AAREIT as a decent issuer. Its industrial and logistics assets should continue to benefit from secular growth tailwinds and remain decently profitable, barring a major downturn.
Credit Highlights:
We like the REIT’s continued ability to reduce its blended funding cost, now at 4.1% compared to 4.4% in 9M2025. Additionally, the logistics specialist is less reliant on fixed-rate debt, now making up 65% of total debt (9M2025: 70%). These improvements are likely due to the environment of lower interest rates experienced in the last year.
AAREIT’s debt maturity profile remains manageable. Out of S$920 million gross debt outstanding, roughly 46% of its debt is due in FY2027 and FY2028 (note that FY2027 is 31 March 2027). The repayment schedule is comfortably staggered, with 22% due in FY2029 and the remainder extending to FY2030 and beyond. We remain comfortable with the REIT’s ability to meet its upcoming obligations, given its steady ability to generate operating cash flows (S$112m annually over the past 4 years), and healthy available liquidity of S$123.5 million in cash and undrawn facilities.
Table 1: Peer comparison
|
Bond Name |
Issuer Name |
Years to Call |
Ask Price |
Yield to Worst |
Credit Rating |
|
AAREIT 4.450% Perpetual Corp (SGD)* |
AIMS APAC REIT |
5.50 |
100.00 |
4.45% |
-/-/- |
|
AIMS APAC REIT |
4.07 |
102.53 |
4.02% |
-/-/- |
|
|
AIMS APAC REIT |
4.90 |
99.80 |
3.92% |
-/-/- |
|
|
ESR REIT |
4.07 |
106.25 |
4.06% |
-/-/- |
|
|
Mapletree Logistics Trust |
3.49 |
103.84 |
3.13% |
-/-/BBB- |
|
|
GLL IHT Pte Ltd |
4.01 |
102.88 |
3.57% |
-/-/- |
|
|
CDL Hospitality Trusts |
4.73 |
100.03 |
3.69% |
-/-/- |
|
|
CDL Hospitality Trusts |
5.48 |
101.20 |
3.76% |
-/-/- |
|
|
*Bond is not yet issued, final price guidance is not yet confirmed Source: Bloomberg, Bondsupermart, iFAST Compilations. Data as of 26 February 2026. |
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Overall, AAREIT’s credit profile is stable. Our analysis below takes the 4.45% IPG as our reference, though the final price guidance (FPG) is likely to come in below the 4.45% IPG level.
In Table 1 shown above, we compare these new perpetuals with AAREIT’s existing outstanding perpetuals. At a 4.450% yield, this new perpetual issue is fairly priced compared to AAREIT’s outstanding perpetuals, especially when we expect the FPG to come in below the 4.45% IPG level.
We also compare the newly issued perpetuals against perpetuals issued over the last year or so, by AAREIT’s peers in the property space (MLTSP, EREIT, GUOLSP, and CDREIT). Do note that some of these issuers have similar businesses to AAREIT, with logistics and/or industrial exposure (such as EREIT and MLTSP), while others may have different business focuses but are still within the broader property space (such as GUOLSP and CDREIT). We note that the implied initial spread of AAREIT (roughly 2.80%) is lower than ESR-REIT (3.51%).
In general, these new AAREIT perpetuals will offer a higher yield pickup compared to most of the other bonds seen in Table 1 above.
Finally, we emphasise that perpetual bonds in general (including these new perpetuals) may be subject to several risks, including non-call risks, considering the smaller initial margin for this issue relative to those of AAREIT’s outstanding perpetuals. Other typical clauses include non-cumulative deferral and dividend-stopper clauses. Investors who are comfortable with these perpetual-related risks may consider this new issuance attractive, considering AAREIT’s solid outlook and the decent yield pickup relative to peers.
Disclosure: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a position in AAREIT 4.100% Perpetual Corp (SGD). The analyst who produced this report holds a NIL position in the abovementioned securities.
