First Real Estate Investment Trust’s Investor Presentation: 14 Numbers for Investors to Know

First Real Estate Investment Trust (SGX: AW9U) is a healthcare-focused REIT that owns 18 properties in Indonesia, Singapore, and Korea.

There are good reasons why investors may be paying attention to First REIT. Over the past five years, its unit price has gained a respectable 51.5%. Moreover, its distribution per unit has grown in each consecutive year since 2011.

Last week, First REIT took part in a Singapore REITs Day event held in Tokyo, Japan, and gave a presentation. The slide deck it prepared was shared.

Within the slides, I found 14 numbers that could help investors understand the REIT.

A bird’s eye view

2017-03-21 First REIT Slide 1
Source: First REIT’s presentation

First REIT has 14 properties in Indonesia, with the majority being hospitals. Meanwhile, it also has three nursing homes in Singapore and one hospital in Korea. Together, the 18 properties are estimated to be worth almost S$1.3 billion.

The REIT is also keen to point out that its hospitals have long-term leases that last between 10 and 15 years.

The lease structure

2017-03-21 First REIT Slide 2
Source: First REIT’s presentation

The slide above delves deeper into the mechanics of First REIT’s long-term leases.

Firstly, First REIT’s long-term leases are denominated in either the Singapore dollar or the US dollar. In Indonesia, the rental structure includes an annual base rental escalation of two times the percentage of Singapore’s CPI (Consumer Price Index) and is capped at 2%. There is also a variable rental growth component that takes into account the total gross revenue of the properties.

For Singapore and Korea, there is an annual increment of 2%.

Total returns

First REIT also put up an illustration of how much its investors have gained since its initial public offering (IPO) in 2007.

2017-03-21 First REIT Slide 3
Source: First REIT’s presentation

Starting with a hypothetical investment of $1,000 in First REIT during its IPO, the REIT estimated that the investment (including dividends and subscriptions to rights units) would have yielded investors $5,957.15. This works out to an annualised gain of around 21.2%. It’s worth noting that investors would have had to put in an additional $880.28 along the way – to subscribe to a fiveforfour  rights issue in 2010 – in order to generate the aforementioned returns.

Foolish takeaway

Like any other investor presentation, First REIT will be attempting to put its best foot forward in presenting itself to investors. The slides above are a representation of the REIT manager’s efforts to provide its perspective on the merits of First REIT.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.