FirstREIT – BT

First Reit Q1 distributable income up 2.5%

INDICATING the resilience of the healthcare sector amid hard times, First Reit emerged from its first quarter in positive territory.

Singapore’s first healthcare real estate investment trust posted a 2.5 per cent year-on-year climb in distributable income to $5.2 million and a 1.6 per cent rise in distribution per unit (DPU) to 1.88 cents.

‘Based on its annualised DPU of 7.62 cents and the closing price of 56 cents on April 21, First Reit achieved a distribution yield of 13.6 per cent,’ said First Reit. This compares with 10.9 per cent in Q1 2008.

Although gross revenue increased 0.4 per cent to $7.4 million, net property income dipped 0.1 per cent to $7.3 million as a result of the commencement of capital expenditure provision of about $31,000 for repair and replacement works for four Indonesian properties, said First Reit.

Despite the current economic situation and challenges faced by many Reits in refinancing, First Reit recently secured a three-year $70 million multi-currency transferrable term loan facility (MCTLF) from OCBC.

This will be used to refinance First Reit’s outstanding bank loans of $50.8 million, with the balance for funding the redevelopment of Adam Road Hospital and possible future asset acquisitions.

Although interest rate is higher for this MCTLF, the term loan facility will provide First Reit with greater flexibility to improve its income generating capacity via further asset enhancements and working with its tenants to continually upgrade services.

Looking ahead, First Reit does not expect its performance to be significantly affected by the current economic situation due to its resilient trust structure which is firmly grounded by long-term leases with stable rentals in Singapore dollars with no currency risks and downward revisions.

First Reit’s CEO Ronnie Tan said: ‘Healthcare services are to a certain extent, recession-proof, as patients continue to seek medical care whether in good or bad times. Our hospitals in Indonesia continue to grow at double digit rates for 2008 despite the financial crisis. We believe this positive trend will benefit us.’