AIMS AMP: (S$1.47) Floor area to unearth
Maybank-KE initiates on AIMS AMP (AAREIT) with Hold and TP of $1.47, citing the lack of immediate catalysts.
Sponsored by AMP Capital, a leading Australian property investor and the AIMS Financial Group, AAREIT has 26 properties with 6.1m sf of net lettable area. By rental income, 60% are from warehouses, 20% from factories and the remaining from business parks.
On the segments, Maybank-KE expects both warehouse and factory supply to peak in 2016 and translate to pressure on rent reversions in 2016-17, before stabilising in 2018 (-0.4%). While business parks supply is estimated to peak in 2016, there will be no new supply over 2017-18. Hence, reversions are expected to soften in 2016-17, before climbing again in 2018.
Risks include an outright economic recession and significant tenant risk, where master lessee CWT contributes 21.8% to the REIT's gross rental income.