On 25 January 2023, AIMS APAC REIT (“AA REIT”) have announced their third quarter business update for FY2023. The results have shown improvement, and I have liked that they have increased the diversification of their tenant base.

However, I have changed my analysis of the interest coverage to use the adjusted interest coverage that was provided by management. The reason is because it includes the amount reserved for distribution to Perpetual Securities holders, which has higher priority than distribution to unitholders. Something that I believe investors should take note of as their dividend may be affected to satisfy the needs of the lenders.

Background

AA REIT is a real estate investment trust listed on the Mainboard of the Singapore Exchange Securities Trading Limited. Their investment mandate is to invest in high quality income-producing industrial real estate throughout