First Real Estate Investment Trust’s Latest Earnings: Distribution Per Unit Grows

First Real Estate Investment Trust (SGX: AW9U) is Singapore’s first healthcare real estate investment trust (REIT) whose portfolio consists of 19 properties located in Indonesia, Singapore and South Korea.

Yesterday, the REIT announced its financial results for the third quarter ended 30 September 2017 (3Q2017). The reporting period was from 1 July 2017 to 30 September 2017.

Here’s a quick rundown on the financial figures from the earnings release:

1. Gross revenue for 3Q2017 grew 3.3% year-on-year to S$27.8 million.

2. Net property income (NPI) went up 3.2% to S$27.5 million.

3. Distributable income increased 2.2% to S$16.7 million.

4. The reporting quarter’s distribution per unit (DPU) was 2.14 cents, up from 2.12 cents seen a year ago.

5. The net asset value per unit was at S$1.0061, as at 30 September 2017. This is a decline from S$1.0079 seen at the end of last year.

The growth in gross revenue was due to contribution from Siloam Hospitals Labuan Bajo, as well as higher rental income from existing properties in Indonesia, Singapore and South Korea.

For the nine-month period, First REIT’s gross revenue and NPI increased 3.0% each to S$82.4 million and S$81.5 million respectively. Meanwhile, DPU edged up 1.3% to 6.42 cents.

As of 30 September 2017, the trust had a gearing of 32.6%, an increase from 31% seen at the end of June 2017. However, the current gearing is well below the regulatory limit of 45%.

Looking ahead, First REIT’s manager said:

“The Trust has recently completed the acquisition of an integrated property comprising a hospital and retail mall in Bau Bau city on Buton Island, Indonesia. Continuing on the tracks of yield-accretive acquisitions, we have also announced our proposed joint venture with Lippo Malls Indonesia Retail Trust to jointly acquire another integrated development in Yogyakarta.

With the Buton Property, and potentially another new-quality asset, Unitholders can look forward to a steady income stream that will continue to deliver consistently growing DPU.”

Units of the healthcare REIT are changing hands at S$1.375 now. This translates to a price-to-book ratio of 1.4 and a trailing yield of 6.2%.

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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 Sudhan P doesn’t own shares in any companies mentioned.