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What Investors Should Know About First Real Estate Investment Trust’s Latest Earnings and Valuation

First Real Estate Investment Trust (SGX: AW9U) is a REIT that invests mainly in healthcare-related properties across Asia. Its current portfolio consists of 18 properties that are located in Indonesia, Singapore, and South Korea. Most of the properties (14 of them) are in Indonesia.

There are two things about the REIT that investors may want to know about: Its latest financial performance and valuation.

Financial performance

Here’s a table showing important items from First REIT’s income statements for the first quarters of 2017 and 2016:


Source: First REIT 2017 first quarer earnings

It was a good quarter from the REIT as it reported growth in gross revenue, net property income, distributable amount, and the distribution per unit. First REIT’s performance was driven by new contributions from Siloam Hospitals Labuan Bajo, which was acquired in December 2016.

Valuation

There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows First REIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 39 REITs that are in Singapore’s stock market.


Source: SGX Stock Facts; data as of 15 June 2017

We can observe that First REIT has a premium valuation, given the fact that it has an above-average PB ratio and distribution yield.

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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.