First REIT property in Singapore, Pacific Healthcare Nursing Home.First REIT property in Singapore, Pacific Healthcare Nursing Home.

Singapore-listed healthcare REIT, First REIT (SGX:AW9U) announced on 19 January that it has posted a distribution per unit (DPU) of 2.09 Singapore cents for its 4Q 2015, an increase of 2.5% as compared to the same period in 2014.

This resulted in an annualised DPU of 8.30 cents, a 3.1% increase when compared to the preceding year. The DPU figures came on the back of an increase in distributable income for the quarter that increased 5.0% to SSGD15.7 million. The REIT also saw a 7.4% and 7.9% jump in gross revenue and net property income to SGD25.7 million and SGD25.4 million respectively during the period.

“The growth for the year was due to a full year’s contribution from Siloam Sriwijaya which was acquired in December 2014 as well as a maiden contribution from Siloam Hospitals Kupang & Lippo Plaza Kupang acquired in December 2015”, said the REIT in a statement on the results.

“Moving into FY 2016, unitholders can look forward to continuous growth as the trust plans to further expand our asset size with more yield-accretive acquisitions”, said Dr Ronie Tan, CEO of the REIT’s manager. “Moreover, with the increase of the regulatory gearing limit from 35% to 45% proposed by the Monetary Authority of Singapore, this will give us greater operational flexibility and headroom for more acquisitions”, he added.

The REIT pointed out that despite a slowdown in the global economy, the Indonesian healthcare market will see growth of about 10% annually till about 2017 since the introduction of a national health insurance scheme known as Jaminan Kesehatan Nasional. “Supply currently falls short of demand, especially in the private healthcare sector and there is room for the expansion and addition of more healthcare facilities”, it said.

First REIT’s sponsor, PT Lippo Karawaci, currently has a pipeline of 46 hospitals, presenting it with strong acquisition opportunities in the future, said the REIT. Units of First REIT finished 1.2% higher on the Singapore Exchange to end at SGD1.20.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.