SINGAPORE - AIMS AMP Capital Industrial Reit (AA Reit) posted a 2.8 per cent drop in distribution per unit (DPU) in the third quarter amid a decline in revenue.
DPU for the three months ended Dec 31, 206, came in at 2.77 Singapore cents, down from 2.85 cents a year ago, the trust manager said on Thursday (Feb 9).
Gross revenue slipped by 6.7 per cent year on year to S$30.4 million, owing to lower rental contributions for the properties at 27 Penjuru Lane, 8 &10 Pandan Crescent as well as the loss in revenue due to the redevelopment of 8 & 10 Tuas Avenue 20.
This was partially offset by higher rental and recoveries for the properly at 29 Woodlands Industrial Park E1, it noted.
The lower turnover and higher property expenses led to a 6 per cent decline in third quarter net property income to S$19.8 million, compared with about S$21 million in the previous year.
There were 19 new and renewal leases signed during the period - representing 82,149.3 square metres or 13.1 per cent of net lettable area, the trust manager added.
"As a result of our focus on long-term tenant relationships and prioritising tenant retention, our portfolio occupancy is at 94.0 per cent, and we continue to be above the industry average of 89.5 per cent," said Mr Koh Wee Lih, chief executive of trust manager AIMS AMP Capital Industrial Reit Management.
The trust manager expects industrial rents to remain under pressure in view of the uncertain "macroeconomic and geopolitical outlook and an oversupply of industrial space here."
"AA Reit will continue to remain focused on managing risks through prudent capital management and diversification across its portfolio of 27 properties," it added.