First REIT Financial Results Ending 31 Mar 2017

“The 1.4% growth in 1Q DPU was achieved on the back of the full quarter’s rental income contribution from Siloam Hospitals Labuan Bajo (“SHLB”), which was acquired in December 2016. This is our 11th consecutive quarter of DPU growth since 2Q 2014, a testament of our well-tested strategy of acquiring yield-accretive assets. In FY 2017, we will continue to reinforce this strategy to maximise returns to our Unitholders,”

Dr Ronnie Tan, Bowsprit’s Chief Executive Officer.

  • 2.14 cents (1Q FY17)
  • 21 Apr 2017 (Ex-date). 26 May 2017 (Payment date)

First REIT 1Q DPU up, buoyed by latest acquisition

Key highlights and significant achievements in 1Q 2017

  • DPU up 1.4% to 2.14 Singapore cents compared to 2.11 Singapore cents in 1Q 2016
  • Distribution to Unitholders rose 2.4% to S$16.6 million compared to S$16.2 million in 1Q 2016
  • Issued 2,699,321 new units at an issue price of S$1.2559 per new Unit to eligible Unitholders who have elected to participate in the distribution reinvestment plan (“DRP”) for 4Q 2016

 

Bowsprit Capital Corporation Limited (“Bowsprit”), the Manager of First Real Estate Investment Trust (“First REIT” or the “Trust”), began first quarter ended 31 March 2017 (“1Q 2017”) on a strong footing with record distribution per unit (“DPU”) of 2.14 Singapore cents, up from 2.11 Singapore cents in the corresponding quarter of the preceding year (“1Q 2016”). Based on annualised DPU of 8.68 Singapore cents and closing price of S$1.31 as at 31 March 2017, the latest distribution translated to a yield of 6.6%.

Distributable income for the quarter was S$16.6 million, up 2.4% from S$16.2 million in 1Q 2016. Both the gross revenue and net property income (“NPI”) increased at the same 2.5% to S$27.2 million and S$26.9 million respectively.

As at 31 March 2017, First REIT’s gearing ratio was 31.0%, with an interest cover of 5.7 times. To mitigate the impact of interest rate fluctuations, about 90.9% of the Trust’s borrowings are on a fixed rate basis.

 

Outlook

Indonesia remains First REIT’s key focal market for growth, especially with the expanding pipeline of over 40 hospitals from its Sponsor, PT Lippo Karawaci Tbk, for acquisition. Southeast Asia’s largest economy, Indonesia’s gross domestic product grew 5.02% in 2016, an improvement from 4.88% in 2015 1 . For 2017, International Monetary Fund is forecasting a growth of 5.1% 2 , driven by government’s reforms and infrastructure developments. Meanwhile, the healthcare sector remains supported by the ongoing national health insurance scheme, which now allows more affluent Indonesians to supplement coverage under the scheme with private health insurance, lending further weight to private healthcare spending.

 

Distribution Reinvestment Plan (“DRP”)

The DRP will not be applicable for this quarter. All Unitholders will be receiving 1Q 2017 DPU of Singapore 2.14 cents in cash, payable on 26 May 2017. The Manager may consider applying the DRP at a later date and Unitholders will be notified accordingly.

 

Attachments

  1. Financials
  2. Press Release

 

IMPORTANT NOTICE

The value of units in First REIT (“Units”) and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request the Manager to redeem their Units while the Units are listed. It is intended that Unitholders of First REIT may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the “SGX- ST”). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.

This document is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Units. The past performance of First REIT is not necessarily indicative of the future performance of First REIT. This document may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s view of future events.

 

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