An IFA report is always great reading material for me.
For a start, I wonder if VBs still remember Asian Corporate Advisors (ACA)?
I am glad neither first quartile nor liberal discounts were used this time.
This time around, ACA actually used 1x RNAV as the lower bound. And thanks to comparable industrial REITs (Mapletree Industrial, ESR, AIMS and Capitaland Ascendas) all trading >NAV, their 1.25x NAV multiple (average) was used to derive the upper bound. And to give ACA more credit, they also stated that AI Reit's prospectus are improving and share price may not have baked in the improvement.
CIRCULAR TO UNITHOLDERS
The Manager (through the IBC) has appointed Asian Corporate Advisors Pte. Ltd. as the independent financial adviser to advise the Independent Directors in respect of the Offer.
We have applied the simple average P/NAV ratio for the Selected Comparable REITs of approximately 1.25 times to the AI-REIT Group’s RNAV per Unit of S$0.519 to derive at the higher bound of our estimated valuation range of S$0.649 per Unit. As such, the Offer Price of S$0.480 is below our estimated value range (“Estimated Value Range”) for the Units of between S$0.519 and S$0.649.
We consider the financial terms of the Offer, on balance to be
NOT FAIR from a financial point of view after considering, inter alia, the following factors:-
(i) The AI-REIT Group appears to be on a recovery track following completion of the implementation of the Internalisation – in particular, in 9M FY2025, the AI-REIT Group recorded higher net property income of approximately S$50.4 million in 9M FY2025 (9M FY2024: S$41.7 million) and higher total return attributable to Unitholders of approximately S$20.1 million (9M FY2024: S$15.7 million)
We also note from the result announcement for 9M FY2025 that barring unforeseen circumstances, AI-REIT is expected to deliver a double-digit percentage increase in income available for distribution per Unit for FY2025. In addition, as announced on 12 November 2025, the External Auditors confirmed that the note relating to the EOM on Going Concern is no longer applicable to the AI-REIT Group’s financial statement as at 30 September 2025 given: (a) completion of the Internalisation process; (b) the lenders’ waiver of the review event following the change of manager; and © constructive discussions on refinancing for March 2026. Lastly, the AI-REIT Group’s gearing and LTM Distribution Yield appear to be in general more favourable than the Selected Comparable REITs.
We note that Unitholders may not have fully accorded the recent relative improvement in financial performance in their transactions in the market.
The Offer Price represents discounts of approximately 1.6% and 7.5% from the AI-REIT Group’s NAV and RNAV per Unit as at 30 September 2025 respectively
Based on our assessment of the financial terms of the Offer as set out above, we
advise the Independent Directors that they should recommend Unitholders to ACCEPT the Offer.
The IBC, having considered carefully as at the Latest Practicable Date the factors set out in the IFA Letter and the advice given by the IFA, concurred with the advice given by the IFA in respect of the Offer.
Accordingly, the IBC recommended to the Independent Directors that the Independent Directors recommend that the Unitholders ACCEPT the Offer
IFA opinion:
https://links.sgx.com/FileOpen/Offer_Ann...eID=870405
P.S. ACA were the IFA for Ossia International's MBO.
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.
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