AIMS APAC REIT ("AIMS") has just announced on May 31, 2023 that it is raising equity of S$100Mil to fund asset enhancement initiatives ("AEI") and property redevelopment. AIMS has an excellent track record of successfully executing AEIs and redevelopments to unlock value organically. The most wonderful aspect is that on top of private placement, AIMS has also included a preferential tranche for existing unit-holders to take part in the additional investment.
1. Currently Identified Properties for AEI and Redevelopment:
AIMS still has over 500,000sqft in terms of Gross Floor Area that it can utilised for development in Singapore and up to 1.5million sqft of GFA available for development in Australia. The redevelopment of 3 Tuas Avenue into a modern ramp up 4 storey facility from 0.92 plot ratio to 1.40 plot ratio will boost GFA by 52.5%. AIMS management has also secured a 10 years master lease agreement with its tenant upon the building's completion.
2. Use of S$100Mil from Equity Fund Raising Exercise
(i) S$32Mil will fund the AEIs of the 2 properties of 29 Woodlands Industrial Park E1 and 23 Tai Seng Drive;
(ii) S$65.2Mil will be used to partially or wholly fund any other potential AEIs (on top of above mentioned properties in point (i) ) as well as redevelopment of 3 Tuas Avenue and
(iii) S$2.8Mil to pay off professional service fees and expenses related to the equity raising exercise.
3. Aggregate Leverage Will Be Lowest Among Industrial S-REITs peers after fund raising
The aggregate leverage will drop from 36.1% (as at 31 March 2023) to 32.8% post completion of the equity raising exercise. This will give a debt headroom of S$275Mil (assuming internal target maximum leverage of 40%) for AIMS to exploit on any opportunistic acquisitions or further re-development opportunities
|AIMS Optus Australia Warehousing Facility|
4. Important Timelines Not To Be Missed
Do take note of the key timelines so as not to miss any subscription (for those interested) for the preferential placement. It will commence on June 14, 2023 and end on June 22, 2023.
Between 34 New Units for every 1,000 existing Units to be held as at the Preferential Offering Record Date and 35 New Units for every 1,000 existing Units to be held as at the Preferential Offering Record Date. The allotment ratio for the Prefential Offering will be announced later.
As AIMS management team has a solid track record of executing organic growth opportunities via AEIs and redevelopments, I will most probably be deploying additional capital and taking part in this preferential offering.