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3 Things That Investors Should Know From First Real Estate Investment Trust’s Latest Results Presentation

First Real Estate Investment Trust (SGX: AW9U), or First REIT, is a healthcare-focused real estate investment trust.

It currently has a portfolio of 18 properties (14 in Indonesia, three in Singapore, and one in South Korea) that are mostly healthcare-related. The REIT’s sponsor is Indonesia’s largest listed property company, PT Lippo Karawaci Tbk.

In this article, we will learn three quick things about the REIT from its second quarter ended 30 June 2017 (2Q 2017) results presentation.

Second Quarter 2017 Results

Source: First REIT Second Quarter 2017 Press Release

Here, we can see that all metrics have improved, both on a quarterly and yearly basis as compared to last year.

Distribution per unit (DPU) trend

Source: First REIT Second Quarter 2017 Presentation

The above is a quick summary of the DPU trend from 2011 to 2017.

What’s useful to note here is that the upward trend has continued since 2011. During this period, DPU has risen from 1.58 cents in the first quarter of 2011 to 2.14 cents in the second quarter of this year.

To put the above into perspective, DPU had risen by 35.4% during the timeframe.

Lease Expiry Profile

Source: First REIT Second Quarter 2017 Presentation

One of the key attributes that investors pay attention to when investing in a business is the sustainability of income.

Many factors contribute towards the long term sustainability of a REIT’s income and lease expiry profile is one of those factors.

What is useful to note here is that no lease will expire in the next three years. What’s more, roughly 76% of the leases will not expire until five years later, with 56.3% of all leases expiring only after 10 years.

Such long lease profiles should provide investors with some assurance that First REIT will likely be able to sustain its current income for many years to come.

Conclusion

The above is a quick glimpse of a few things that will give investors an overview of First REIT. Investors who find the above interesting may want to explore this REIT further on their own prior to committing any capital.

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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.