First REIT's property in Singapore, Pacific Healthcare nursing home in Bukit Merah (Photo: REITsWeek)

Indonesia-heavy health care landlord, First REIT, has achieved a distribution per unit (DPU) of 2.15 Singapore cents for its 4Q 2017, an increase of 0.9% compared to 2.13 cents recorded for the corresponding period of 2016.

This after the REIT’s gross revenue and net property income (NPI) for the period grew by 5.8% and 4.9% to SGD28.6 million (USD21.57) and SGD28.0 million respectively.

The healthcare REIT has attributed the growth to full quarter’s contribution from Siloam Hospitals Labuan Bajo, which was acquired in December 2016, and maiden contributions from Siloam Hospitals Buton and Lippo Plaza Buton, and Siloam Hospitals Yogyakarta, which were acquired in October 2017 and December 2017 respectively.

Correspondingly the REIT’s annualised DPU of 8.57 cents represents a gain of 1.2% compared to what was achieved in FY 2016.

“Our growing yield-accretive acquisitions have made a positive impact to First REIT’s performance, delivering consecutive years of record DPU to our unitholders”, said Victor Tan, CEO of the REIT’s manager.

“With the two new properties acquired in FY 2017, our asset size has expanded by 6.3% to SGD1.35 billion compared to SGD1.27 billion in FY 2016”.

“Our enlarged portfolio will not only raise the profile of the trust, it will also enhance our overall capital management flexibility to pursue future yield accretive acquisitions to deliver increasing returns to our unitholders”, he added.

As at 31 December 2017, the REIT’s gearing was at 33.6%, with total debt of SGD478.6 million, up from 31.1% and a total debt of SGD417.0 million as at 31 December 2016.

First REIT’s portfolio maintains committed occupancy of 100%, with the next rental renewal due in 2021.

For the quarters ahead, First REIT expects Indonesia’s stronger economic outlook, and an on-going national health insurance scheme to maintain demand for better quality private healthcare facilities.

“First REIT remains well-positioned for further growth, with a strong acquisition pipeline of 39 hospitals in Indonesia from its Sponsor, PT Lippo Karawaci Tbk”, the REIT added.

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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.