SINGAPORE (Oct 16): The manager of First Real Estate Investment Trust (First REIT) has declared a 3Q18 distribution per unit (DPU) of 2.15 cents, which 0.5% higher than its DPU of 2.14 cents in the same quarter a year ago.
Revenue for the quarter grew 5.1% y-o-y to $29.2 million from $27.8 million previously, on the back of contributions from the REIT’s latest acquisitions, Siloam Hospitals Buton & Lippo Plaza Buton and Siloam Hospitals Yogyakarta, as well as from existing properties.
Accordingly, 3Q net property income (NPI) rose 5.4% to $28.9 million from $27.5 million a year ago.
Finance costs for the quarter grew 25.3% to $5.5 million compared to $4.4 million in 3Q17, mainly due to higher drawdown of loans to finance the REIT’s acquisition of Buton Property and SHYG in 4Q17; the second progress payment for development of new Siloam Hospitals Surabaya in 3Q17; as well as write off of unamortised loan related costs due to refinancing of bank loans.
Other expenses, too, rose to $0.5 million from $0.4 million previously due to an unrealised exchange loss on the REIT’s USD loan.
On an annualised basis and based on First REIT’s closing price of $1.26 as at Sept 28, the latest distribution translates to a yield of 6.8%.
“Contributions from our latest acquisitions and existing properties continued to bolster the trust’s revenue and NPI in the third quarter,” comments Victor Tan, CEO of the REIT manager, Bowspirit Capital Corp.
Going forward, Tan believes OUE Lippo Healthcare’s proposed acquisition of Bowspirit will be one of the trusts’ key growth drivers – as it will grant the trust access to a more diversified pool of assets via the right of first refusal agreements granted by both OUE Lippo Healthcare Limited and PT Lippo Karawaci Tbk for their portfolios.
“This will effectively expand First REIT’s geographical catchment within Asia, allowing the trust to potentially pursue more yield-accretive acquisitions to deliver stable returns to our unitholders,” he adds.
Units in First REIT closed 1 cent higher at $1.18 on Tuesday.
