FIRST Real Estate Investment Trust (First Reit) yesterday reported net distributable income of $5.3 million for the third quarter ended Sept 30, 2008 – 12.4 per cent more than a year ago.

This was driven by a 7.4 per cent year-on-year hike in gross revenue to $7.6 million in Q308. Higher rentals from four Indonesian properties acquired in 2006 and rentals from another four local properties bought last year contributed to the revenue increase.

To be paid out on Nov 28, distribution per unit (DPU) for the healthcare trust in Q308 was 1.92 cents, 0.2 cent more than in the same period last year. This translates to an annualised DPU of 7.60 cents. Based on the closing price of 39.5 cents on Oct 17, the distribution yield stands at 19.2 per cent.

‘In today’s challenging economic environment around the world, we remain optimistic that the demand for quality healthcare will continue to grow,’ said Ronnie Tan, CEO of First Reit manager Bowsprit Capital Corporation Ltd.

‘Healthcare tends to be a resilient sector – everyone still has to look after his health in good or bad times. Moreover, the aging population and its related diseases will continue to provide opportunities for healthcare services.’

First Reit’s portfolio comprises eight properties in Singapore and Indonesia. According to the trust, revenues are derived from long- term leases which are denominated in Singapore dollars and have no provision for downward rental revisions.

Looking ahead, First Reit said that it will focus on improving the income-generating capacity of its existing healthcare properties. It will enhance assets and work with tenants to continually upgrade healthcare services.

While the trust continues to have headroom for more acquisitions (with debt-to-property valuation ratio standing at 15.6 per cent), Dr Tan said: ‘We will continue to exercise prudence in assessing the attractiveness, timing and sequence of future acquisitions.’

The manager expects First Reit to continue performing well for the rest of the financial year. The trust’s unit price ended 1.5 cents higher yesterday at 41.5 cents.