10 Quick Things That Investors Should Know About First Real Estate Investment Trust’s Latest Result
First Real Estate Investment Trust (SGX: AW9U) or First REIT is a healthcare-focused real estate investment trust.
It currently has a portfolio of 19 properties (15 in Indonesia, three in Singapore, and one in South Korea) that are mostly healthcare-related facilities. The REIT’s sponsor is Indonesia’s largest listed property company, PT Lippo Karawaci Tbk.
The REIT recently announced its third quarter results for the year ending 31 December 2017 (3Q 2017). Here, we will look at 10 things that investors should know about its latest result.
1. Quarterly gross revenue grew 3.3% whilst net property income improved by 3.2%, as compared to the same period last year.
2. Distribution per unit (DPU) grew 0.9% year-on-year.
3. Based on an annualised DPU of 8.58 Singapore cents and the closing price of S$1.335 as at 29 September 2017, the latest distribution translated to a yield of 6.4%.
4. The gearing, as of 30 September 2017, stood at 32.6%.
5. Committed occupancy rate stood at 100% as at September 2017.
6. The REIT has a long term lease expiry profile with 24.6% expiring in 3-5 years, 19.2% expiring within 10 years and 56.3% expiring after 10 years.
7. There are 40 right of first refusal hospital properties in the pipeline.
8. There’s a proposal to jointly acquire a new property with Lippo Malls Indonesia Retail Trust (SGX: D5IU), namely Yogyakarta, for $27 million. The property is an integrated hospital and retail development in Java.
9. The acquisition of the Buton Property comprising of Siloam Hospitals Buton and Lippo Plaza Buton, for a purchase consideration of S$28.5 million, was completed on 10 October 2017. The transaction increased total properties owned to 19.
10. Below is the latest outlook provided by the REIT:
“Indonesia’s Gross Domestic Product grew at 5.01% in the second quarter, at the same pace as in the first quarter. President Joko Widodo has expressed in Parliament that he expects Indonesia’s economy to grow by 5.4% next year, supported by an increase in consumption, investments and better trade performance…….
Along with stronger economic growth prospects, the national health insurance scheme will continue to drive demand for better quality private healthcare among the rising middle-income class in Indonesia. The Trust, with its strong portfolio of 15 properties in Indonesia, is well-positioned to cater to this growing demand.”