First REIT 1Q DPU up, buoyed by latest acquisition
SINGAPORE – 17 April 2017 – Bowsprit Capital Corporation Limited (“Bowsprit”), the Manager of First Real Estate Investment Trust (“First REIT” or the “Trust”), began first quarter ended 31 March 2017 (“1Q 2017”) on a strong footing with record distribution per unit (“DPU”) of 2.14 Singapore cents, up from 2.11 Singapore cents in the corresponding quarter of the preceding year (“1Q 2016”). Based on annualised DPU of 8.68 Singapore cents and closing price of S$1.31 as at 31 March 2017, the latest distribution translated to a yield of 6.6%.
“The 1.4% growth in 1Q DPU was achieved on the back of the full quarter’s rental income contribution from Siloam Hospitals Labuan Bajo (“SHLB”), which was acquired in December 2016. This is our 11th consecutive quarter of DPU growth since 2Q 2014, a testament of our well-tested strategy of acquiring yield-accretive assets. In FY 2017, we will continue to reinforce this strategy to maximise returns to our Unitholders,” said Dr Ronnie Tan, Bowsprit’s Chief Executive Officer.
Distributable income for the quarter was S$16.6 million, up 2.4% from S$16.2 million in 1Q 2016. Both the gross revenue and net property income (“NPI”) increased at the same 2.5% to S$27.2 million and S$26.9 million respectively.
As at 31 March 2017, First REIT’s gearing ratio was 31.0%, with an interest cover of 5.7 times. To mitigate the impact of interest rate fluctuations, about 90.9% of the Trust’s borrowings are on a fixed rate basis.
Key highlights and significant achievements in 1Q 2017
- DPU up 1.4% to 2.14 Singapore cents compared to 2.11 Singapore cents in 1Q 2016
- Distribution to Unitholders rose 2.4% to S$16.6 million compared to S$16.2 million in 1Q 2016
- Issued 2,699,321 new units at an issue price of S$1.2559 per new Unit to eligible Unitholders who have elected to participate in the distribution reinvestment plan (“DRP”) for 4Q 2016Outlook
- Indonesia remains First REIT’s key focal market for growth, especially with the expanding pipeline of over 40 hospitals from its Sponsor, PT Lippo Karawaci Tbk, for acquisition. Southeast Asia’s largest economy, Indonesia’s gross domestic product grew 5.02% in 2016, an improvement from 4.88% in 2015. For 2017, International Monetary Fund is forecasting a growth of 5.1%, driven by government’s reforms and infrastructure developments. Meanwhile, the healthcare sector remains supported by the ongoing national health insurance scheme, which now allows more affluent Indonesians to supplement coverage under the scheme with private health insurance, lending further weight to private healthcare spending.
Summary of Financial Results for period ended 31 March 2017
|(S$’000)||1Q 2017||1Q 2016||Change (%)|
|Net Property Income||26,867||26,207||2.5|
|Distribution per unit (cts)||2.14||2.11||1.4|
|Annualised Distribution per unit (cts)||8.68||8.471||2.5|
1 Actual distribution paid for FY 2015.
|Distribution||1 January 2017 to 31 March 2017|
|Distribution type||(a) Taxable income(b) Tax-exempt income
(c) Capital distribution
|Distribution rate||Total: 2.14 cents per unit(a) Taxable income distribution: 0.07 cents per unit
(b) Tax-exempt income distribution: 1.17 cents per unit
(c) Capital distribution: 0.90 cents per unit
|Book closure date||25 April 2017 at 5.00 pm|
|Ex-dividend date||21 April 2017 at 9.00 am|
|Payment date||26 May 2017|
Distribution Reinvestment Plan (“DRP”)
The DRP will not be applicable for this quarter. All Unitholders will be receiving 1Q 2017 DPU of Singapore 2.14 cents in cash, payable on 26 May 2017. The Manager may consider applying the DRP at a later date and Unitholders will be notified accordingly.
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About First REIT
First Real Estate Investment Trust (“First REIT”) is a real estate investment trust constituted by the Trust Deed entered into on 19 October 2006 between Bowsprit Capital Corporation Limited as the Manager and HSBC Institutional Trust Services (Singapore) Limited as the Trustee. First REIT was listed on the Singapore Exchange Securities Trading Limited on 11 December 2006.
First REIT is Singapore’s first healthcare real estate investment trust that aims to invest in a diversified portfolio of income-producing real estate and / or real estate-related assets in Asia that are primarily used for healthcare and / or healthcare-related purposes.
Managed by Bowsprit Capital Corporation Limited, First REIT’s portfolio consists of 18 properties located in Indonesia, Singapore and South Korea, namely 1) Siloam Hospitals Lippo Village, 2) Siloam Hospitals Kebon Jeruk, 3) Siloam Hospitals Surabaya, 4) Imperial Aryaduta Hotel & Country Club, 5) Mochtar Riady Comprehensive Cancer Centre, 6) Siloam Hospitals Lippo Cikarang, 7) Siloam Hospitals Manado & Hotel Aryaduta Manado, 8) Siloam Hospitals Makassar, 9) Siloam Hospitals Bali, 10) Siloam Hospitals TB Simatupang, 11) Siloam Hospitals Purwakarta, 12) Siloam Sriwijaya, 13) Siloam Hospitals Kupang & Lippo Plaza Kupang, 14) Siloam Hospitals Labuan Bajo, 15) Pacific Healthcare Nursing Home @ Bukit Merah, 16) Pacific Healthcare Nursing Home II @ Bukit Panjang, 17) The Lentor Residence and 18) Sarang Hospital.
Its hospital assets in Indonesia are operated by PT Siloam International Hospitals Tbk, a subsidiary of PT Lippo Karawaci Tbk, a strong brand name in the Indonesian healthcare industry supported by a team of international healthcare professionals, whereas the Imperial Aryaduta Hotel & Country Club and Hotel Aryaduta Manado are operated by The Aryaduta Hotel & Resort Group. Lippo Plaza Kupang is managed by PT Lippo Malls Indonesia. In Singapore, the nursing homes at Bukit Merah and Bukit Panjang are operated by Pacific Healthcare Nursing Home Pte Ltd and Pacific Eldercare and Nursing Pte Ltd respectively. The Lentor Residence is operated by The Lentor Residence Pte Ltd, while Sarang Hospital in South Korea is managed by a private doctor.
Through First REIT, investors can participate in an asset class that has a focus towards Asia’s growing healthcare sector, which is boosted by an increase in life expectancy in Indonesia and the rest of Southeast Asia.
The value of units in First REIT (“Units”) and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request the Manager to redeem their Units while the Units are listed. It is intended that Unitholders of First REIT may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the “SGX-ST”). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
This document is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Units. The past performance of First REIT is not necessarily indicative of the future performance of First REIT. This document may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s view of future events.
 7 February 2017, The Straits Times – Indonesia’s GDP growth slows to 4.9% in Q4
 3 February 2017, International Monetary Fund – Indonesia: Resilient economy can benefit from stronger reforms