First Reit's new properties help boost Q2 results

Siloam Hospitals Bali, one of First Reit's properties. CEO Ronnie Tan of the Reit's manager Bowsprit Capital Corporation said its consistent and strategic acquisition trail has continued to boost growth.
Siloam Hospitals Bali, one of First Reit's properties. CEO Ronnie Tan of the Reit's manager Bowsprit Capital Corporation said its consistent and strategic acquisition trail has continued to boost growth.PHOTO: FIRST REIT

Reit manager credits Kupang property acquired in December

Contributions from recently acquired properties helped healthcare real estate investment trust First Reit boost its second-quarter results.

The Reit, which owns healthcare-related properties in Indonesia, Singapore and South Korea, yesterday posted a distribution per unit (DPU) of 2.11 cents for the three months to June 30.

This was 1.9 per cent higher than a year earlier, said its manager, Bowsprit Capital Corporation.

First Reit's properties in Singapore include the Pacific Healthcare Nursing Home@Bukit Merah and nursing home The Lentor Residence. There are 17 properties in its portfolio.

Based on an annualised DPU of 8.49 cents and a closing price of $1.25 on June 30, the trust maintained a healthy annualised distribution yield of 6.8 per cent.

Distributable income expanded 5.5 per cent to $16.2 million for the quarter.

  • AT A GLANCE

    GROSS REVENUE: $26.6 million (+6.5%)

    DISTRIBUTABLE AMOUNT: $16.2 million (+5.5 %)

    DISTRIBUTION PER UNIT: 2.11 cents (+1.9%)

Gross revenue rose 6.5 per cent to $26.6 million for the quarter, while net property income rose 6.9 per cent to $26.3 million from the previous year.

For the six months ended June 30, gross revenue rose 6.8 per cent to $53.1 million and net property income rose 7.5 per cent to $52.5 million, while distributable income increased 5.8 per cent to $32.4 million.

The growth was mainly owing to the contribution from First Reit's Kupang property in Indonesia - Siloam Hospitals Kupang and Lippo Plaza Kupang -which was acquired in December, said Bowsprit.

Bowsprit chief executive Ronnie Tan said the Reit's consistent and strategic acquisition trail has continued to boost growth.

He added that the trust recently announced the issuing of $60 million subordinated perpetual securities, priced at a fixed distribution rate of 5.68 per cent a year.

"This exercise will lower our gearing from 34 to 30 per cent as the proceeds raised will be used to reduce our existing loans and thus increase our debt headroom for future acquisition opportunities," said Dr Tan.

The additional stream of cash means the trust will not apply the distribution reinvestment plan for this quarter, and may consider it at a later date.

First Reit will continue to look for potential "yield-accretive acquisitions in the region to boost growth", particularly in Indonesia, where its sponsor PT Lippo Karawaci Tbk continues to expand its healthcare portfolio.

First Reit's quarterly earnings per unit was 1.84 cents, down from 1.9 cents a year ago, while net asset value per unit was $1.0312 as at June 30, down from $1.0388 as at Dec 31. Its units closed flat at $1.30 yesterday.

A version of this article appeared in the print edition of The Straits Times on July 15, 2016, with the headline 'First Reit's new properties help boost Q2 results'. Print Edition | Subscribe