Making Sense of First Real Estate Investment Trust From An Investor’s Perspective

First Real Estate Investment Trust (SGX: AW9U) is one of the two healthcare REITs that are listed in Singapore’s stock market.

It currently has 17 properties in its portfolio and they are mostly healthcare-related assets. 13 of those properties are in Indonesia, three are in Singapore, and one is in South Korea.

Looking at a REIT’s property mix gives investors a better feel of the environment and market the REIT operates in. So as you can see, First REIT is highly exposed to Indonesia, an emerging market.

Let’s also take a quick look at some of First REIT’s fundamentals. I’m interested in the price-to-book (PB) ratio, gearing, and distribution yield.

As of 30 June 2016, First REIT has a net asset value per unit of S$1.03. At the RET’s current unit price of S$1.375, this gives rise to a PB ratio of 1.33. What this means is investors are paying a 33% premium on the accounting value of the REIT’s net assets.

Moving to gearing, First REIT has a gearing ratio of 34.4% as of 30 June 2016. For perspective, REITs in Singapore are subjected to a gearing limit of 45%. Investors may also want to note that 85.3% of First REIT’s debt is on a fixed rate basis.

Lastly, First REIT has a trailing distribution of S$0.0839 per unit, which implies a yield of 6.1% at its current unit price.

The data I have presented here about First REIT can serve as a useful starting point for investors to further their research.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Esjay does not own shares in any companies mentioned.