First Reit posts 1.4% rise in 1st-quarter DPU

Record payout comes amid full quarter's rental income from Siloam Hospitals Labuan Bajo

Siloam Hospitals Labuan Bajo was acquired by healthcare- based First Real Estate Investment Trust last December.
Siloam Hospitals Labuan Bajo was acquired by healthcare- based First Real Estate Investment Trust last December. PHOTO: FIRST REIT

Healthcare-based First Real Estate Investment Trust (First Reit) has posted a 1.4 per cent rise in first- quarter distribution per unit (DPU) to a record payout of 2.14 cents.

This was achieved on the back of the full quarter's rental income contribution from Siloam Hospitals Labuan Bajo, which was acquired in December last year.

"This is our 11th consecutive quarter of DPU growth since the second quarter of 2014, a testament to our well-tested strategy of acquiring yield-accretive assets," said Dr Ronnie Tan, chief executive of the Reit manager.

He also said the Reit will continue to reinforce this strategy of acquiring yield-accretive assets this year.

Based on annualised DPU of 8.68 cents and a closing price of $1.31 as at March 31, the latest distribution translates to a yield of 6.6 per cent.

In the first quarter, First Reit issued 2.7 million new units at $1.2559 each to unitholders who had elected to participate in the distribution reinvestment plan for the fourth quarter of last year.


    DISTRIBUTION PER UNIT: 2.14 cents (+1.4%)

    GROSS REVENUE: $27.2 million (+2.5%)

    DISTRIBUTABLE INCOME: $16.6 million (+2.4%)

Distributable income for the three months ended March 31 was $16.6 million, up 2.4 per cent.

Gross revenue increased 2.5 per cent to $27.2 million, while net property income rose by the same percentage to $26.9 million.

First Reit's gearing ratio stood at 31 per cent, with an interest cover of 5.7 times as at March 31.

To mitigate the impact of interest rate fluctuations, about 90.9 per cent of the trust's borrowings are on a fixed-rate basis.

First Reit is optimistic about the Indonesian healthcare market. The country remains its key focal market for expansion, especially with the growing pipeline of more than 40 hospitals from its sponsor, PT Lippo Karawaci, for acquisition.

The Reit manager noted that Indonesia's gross domestic product grew 5.02 per cent in 2016, up from 4.88 per cent the year before.

The International Monetary Fund is forecasting a growth of 5.1 per cent for Indonesia this year, led by the 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," said the Reit manager.

First Reit units closed down half a cent to $1.345 yesterday.

The results were released after the markets close.

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A version of this article appeared in the print edition of The Straits Times on April 18, 2017, with the headline First Reit posts 1.4% rise in 1st-quarter DPU. Subscribe