A Quick Investing Guide to First Real Estate Investment Trust

First Real Estate Investment Trust (SGX: AW9U) is a REIT that invests mainly in healthcare-related properties across Asia.

Over the past five years, First REIT has delivered a total return of 110% (the total return is adjusted for reinvested dividends), so it has clearly been a solid long-term winner in our local stock market. This article will be a quick overview of First REIT to help investors better understand its investment characteristics.

Historical financials

The charts below show how First REIT’s net property income and assets under management have grown from 2007 to 2016.

Source: First REIT 2016 annual report

It’s clear that the REIT has experienced strong growth in both its net property income and assets under management for the timeframe under study.

Revenue and portfolio breakdown

There are two charts just below. The one on the left shows a breakdown of First REIT’s rental income by geography in 2015 and 2016. The one on the right illustrates the properties that First REIT had in its portfolio as of 31 December 2016.

Source: First REIT 2016 annual report

In 2016, over 95% of First REIT’s rental income came from Indonesia. So, it’s clear that there’s a high level of geographic concentration in the REIT’s revenue sources. But, there’s also some level of diversification, as the REIT’s rental income from Indonesia in that year was spread across 14 properties, 11 of which are hospitals.

Relationship with sponsor

First REIT’s sponsor is PT Lippo Karawaci Tbk, one of Indonesia’s largest real estate companies. The chart below traces the REIT’s relationship with its sponsor:

Source: First REIT’s website

Besides managing First REIT, Lippo Karawaci also collectively controls 33.06% of the REIT’s outstanding units.

Stock market performance since IPO

First REIT was listed in 2006. Since its listing, it has been a great long-term winner, as the chart below shows:

Source: First REIT 2016 annual report

The REIT’s stock market performance have beat both the Straits Times Index (SGX: ^STI) and FTSE ST Real Estate Investment Trust Index by a wide margin since its listing.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.