First Reit posts distributable income of $4.61m for Q3

Trust confident of boosting value of assets to $500m before end-2009

SINGAPORE’S first healthcare real estate investment trust (Reit) said yesterday that its third-quarter distributable income came to $4.61 million – 5.4 per cent higher than forecast – due to rental contributions from newly acquired properties.

First Real Estate Investment Trust (First Reit) bought Pacific Healthcare Nursing Homes at Bukit Merah and Senja in April, The Lentor Residence in June and Adam Road Hospital in July.

Distribution per unit (DPU) came to 1.72 cents for Q3 ended Sept 30, ahead of a 1.6 cents forecast. Net property income totalled $7 million, or 15.6 per cent higher than forecast.

Ronnie Tan, chief executive of Bowsprit Capital Corporation, which manages the Reit, said: ‘The regional macro-economic environment, including Indonesia and Singapore, where we have the bulk of our properties, remains positive for 2007.

‘As such, we are confident of exceeding our forecast DPU of 6.51 Singapore cents for the full year.’

The trust is confident of boosting the value of its assets to $500 million before end-2009, Dr Tan said.

First Reit now has eight properties worth $328 million. Its net asset value per unit came to 0.88 of a cent as at Sept 30.

The Reit recently ventured into China, where it agreed with hospitals in Wuxi, Shanghai and Jiangsu province to ‘explore potential acquisitions’.

Earlier this month, First Reit signed a memorandum of understanding to acquire the 90-bed Wuxi New District Phoenix Hospital. In August, it said that it was investing in a 500-bed hospital property in Jiangsu province.

Then, the following month, it agreed to invest in the property assets of the 200-bed Shanghai Woman and Child Healthcare Hospital and the proposed Hengshan Urology Hospital, both in Shanghai.

First Reit said that it is continuing to explore potential acquisitions with its sponsor Lippo Karawaci in Indonesia.

First Reit’s shares closed half a cent down at 77 cents yesterday, with 112,000 shares changing hands.

First REIT’s 3Q07 distributable income exceeds forecast by 7.5% to S$4.68 million

 Revenue exceeds forecast by 15.3% to $7.02 million with contributions from four new acquisitions
 DPU of 1.72 Singapore cents is 7.5% above forecast; translates to annualised distribution yield of 8.65%
 Portfolio expansion continues with China MOUs

SINGAPORE – 22 October 2007 – Bowsprit Capital Corporation (the “Manager”), the manager of First Real Estate Investment Trust (“First REIT”), Singapore‟s first healthcare real estate investment trust, today announced distributable income of S$4.68 million for First REIT‟s third quarter FY2007 ending 30 September 2007. This exceeded forecast by 7.5%.

Distribution Per Unit (“DPU”) for the third quarter was 1.72 Singapore cents or 7.5% higher than forecast. This translates to an annualised DPU of 6.70 Singapore cents, representing a distribution yield of 8.65%, using the closing price of S$0.775 per unit on 19 October 2007.

Actual revenue was booked at S$7.02 million, exceeding the forecast by 15.3% from a base of S$6.09 million. Net Property Income (NPI) grew 15.6% from a forecast of S$6.06 million to an actual NPI of $7.0 million.

The Books Closure and Distribution Payment dates are 1 November 2007 and 29 November 2007 respectively.

Revenue growth in the third quarter was driven by contributions in rental income from First REIT‟s newly acquired properties – Pacific Healthcare Nursing Homes at Bukit Merah and Senja in April 2007, The Lentor Residence in June 2007 and the Adam Road Hospital in July 2007.

With the addition of four healthcare facilities in Singapore, First REIT‟s total group assets amounted to S$328 million while Net Asset Value (NAV) per unit was 0.88 Singapore cents, as of 30 September 2007.

Dr Ronnie Tan, Bowsprit‟s CEO noted, “The regional macroeconomic environment, including Indonesia and Singapore where we have the bulk of our properties, remains positive for 2007. As such, we are confident of exceeding our forecast DPU of 6.51 Singapore cents for the full year.”

Potential Acquisitions

Providing an update on First REIT‟s acquisition targets, Dr Tan added, “Leveraging on the buoyant regional healthcare markets, coupled with our strong acquisition pipeline, we are confident of raising our asset portfolio to S$500 million before end of 2009.”

“In fact, one of our strengths lies in our low gearing at approximately 16.5% giving us more options to fund prospective acquisitions. We have recently ventured into China, establishing agreements with hospitals located in Wuxi, Shanghai and Jiangsu province to explore potential acquisitions”

First REIT signed a Memorandum of Understanding (MOU) with Nantong Rich Hospital Co. Ltd. (“Nantong”) in August 2007 to invest in the property assets of a 500-bed hospital in Jiangsu province via a subscription of Redeemable Convertible Cumulative Preference Shares (RCCPS).

In September 2007, First REIT entered into a conditional agreement to invest in the property assets of the 200-bed Shanghai Woman and Child Healthcare Hospital and the proposed Hengshan Urology Hospital, both located in Shanghai.

Most recently, in October 2007, First REIT signed a MOU to acquire the 90-bed Wuxi New District Phoenix Hospital.

Besides acquiring assets from other vendors in the region, First REIT continues to explore potential acquisitions with its Sponsor, Lippo Karawaci in Indonesia.

Source : SGX

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