Analysis of AIMSAMP REIT

Current Price on 26th Jul 2013 = $1.62

• Current Yield = 6.10%  
• Price-to-book Ratio = 1.051
• Assets per unit = $2.17
• Debt per unit = $0.61 (including current liabilities)
• Gearing = 28.1%
• Secured NAV = $0.659 (40.2%)

AIMSAMP REIT has delivered a set of results which I thought was quite puzzling. The yield dropped to only 6.10% which is very low, way below my target. NAV has increased by 2.5 cents which is good as it shows that it is creating NAV value which lowers its price-to-book ratio.

I suspect that the revenue on 20 Gul Way has not been realized yet, probably due to the contract (if I am not wrong, first two months is rent-free.) Thus, we are not really seeing the full picture of the yield so I am expecting the yield to increase later. Nevertheless, I need to observe this closely as I am banking on it to deliver about 25% of my annual returns.

AIMSAMP Industrial is what I call an organic growth REIT. There is a lot of redevelopment potential which is yield-accretive and NAV value-accretive. They are more stable and visible compared to acquisitions. Although it does not fulfil my target of 8% yield and Price-to-book ratio of below one, I will still hold on to this REIT for its growth prospect.