First REIT has reported a distribution per unit (DPU) of 1.86 cents for the 9MFY2023 ended Sept 30, 6.1% lower y-o-y.
The REIT’s 3QFY2023 DPU of 0.62 cents stood stable for the past two quarters. The DPU will be paid out on Dec 22.
9MFY2023 rental and other income rose by 0.6% y-o-y to $81.4 million mainly due to the acquisition of the Japan nursing homes in March 2022 and September 2022. Rental and other income from Indonesia in the 9MFY2023 fell 1.0% y-o-y to $55.2 million due mainly to currency translation impact.
In local currency terms and before an FRS 116 adjustment on rental straight-lining, rental and other income from First REIT’s hospitals in Indonesia increased 8.8% y-o-y to IDR 515.3 billion ($44.6 million).
Net property and other income stood stable at $79.1 million due to higher property expenses.
Distributable amount fell by 1.2% y-o-y to $38.4 million mainly from higher finance costs and the depreciation of foreign currencies against the Singapore dollar (SGD)
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During the period, the REIT’s unit base rose by 0.9% y-o-y to 2.08 billion units.
As at Sept 30, the REIT’s occupancy stood at 100% with a weighted average lease expiry (WALE) of 11.7 years. Its gearing stood at 39.0% while its interest cover ratio stood at 4.2x. As at Sept 30, the proportion of debt on fixed rates or hedged is 85.9%.
“Healthcare real estate continues to be a resilient asset class with robust demand fundamentals and long-term growth prospects,” says the REIT in its outlook statement.
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In Japan, the capacity in facilities for long-term care is small in comparison to the elderly population which is expected to grow from over 29% of the total population of approximately 125 million in 2023 to almost 35% by 2040.
Singapore also has an ageing population with nursing home capacity to increase in the next five years by at least eight new nursing homes and more than 2,000 beds.
In Indonesia, the number of hospital beds per capita is the lowest in Asean, yet it also has the world’s largest public health insurance scheme, notes the REIT.
Units in First REIT closed at 23.5 cents on Oct 31.
