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First REIT
DPU of $0.0062 remained the same as the previous quarter distribution. Most press and reports highlighted a dismal picture on y-o-y drop in Q3 earnings. While this is true, FREIT gave the drop in its distribution in 2Q23 from $0.0066 to $0.0062. A 6% DPU drop due to financing cost and exchange rate losses. CEO Victor Tan informed that DPU will remain the same (ie $0.0062) going forward. While some other REITs are cutting distribution, FREIT made good to its promise of holding the DPU to $0.0062. Personally I am happy with the result of FREIT given the high interest rates, and geopolitical tensions. Going forward, I hope they will be wise in their divestment persuits (Imperial Ayurdata Hotel etc) and accreditive aquisitions in developed markets when the financial climate is right.
DPU of $0.0062 remained the same as the previous quarter distribution. Most press and reports highlighted a dismal picture on y-o-y drop in Q3 earnings. While this is true, FREIT gave the drop in its distribution in 2Q23 from $0.0066 to $0.0062. A 6% DPU drop due to financing cost and exchange rate losses. CEO Victor Tan informed that DPU will remain the same (ie $0.0062) going forward. While some other REITs are cutting distribution, FREIT made good to its promise of holding the DPU to $0.0062. Personally I am happy with the result of FREIT given the high interest rates, and geopolitical tensions. Going forward, I hope they will be wise in their divestment persuits (Imperial Ayurdata Hotel etc) and accreditive aquisitions in developed markets when the financial climate is right.
Decided to increase my faith in First Reit for their 2.0 strategy, foray into Japan nursing market and their director purchase. I really hope they can divest more into the Japan market, or even expand into Malaysia market. Especially JB area for nursing facilities.
As a young senior in my 50s, i have no doubt on the healthcare sector. Only hope their sponsor or the indon market don' t disappoint us.
As a young senior in my 50s, i have no doubt on the healthcare sector. Only hope their sponsor or the indon market don' t disappoint us.
First Reit
On Sep 18, First Reit : AW9U -2.22% Management independent director Martin Lechner acquired 796,900 units of First Reit at S$0.21 per unit. With a consideration of S$167,349, this increased his direct interest in the Reit from 0.24 per cent to 0.28 per cent. Lechner has been a director of First Reit Management since January 2018. He is also the founding partner and chief investment officer, Corecam.
The portfolio of First Reit encompasses a diverse portfolio of yield-accretive healthcare and healthcare-related real estate assets in Indonesia, Japan, and Singapore. For its H1 FY23 (ended Jun 30), First Reit&rsquo s rental and other income grew to S$54 million, a 0.4 per cent increase from H1 FY22.
This was mainly due to a full half-year rental income contribution from 12 Japan nursing homes acquired from sponsor OUE Healthcare : 5WA 0% in March 2022 and two additional Japan nursing homes acquired from third parties in September 2022.
First Reit Management executive director and CEO Victor Tan noted that global economic uncertainties have brought about a challenging business environment, but the Trust has grown in resilience through the early refinancing of debt and the ongoing diversification of its geographical and tenant mix. This is in line with First Reit&rsquo s 2.0 Growth Strategy, a key thrust of which is to strengthen its capital structure to remain resilient by diversifying funding sources and continuing to optimise its financial position.
As part of the First Reit 2.0 Growth Strategy, First Reit completed an early refinancing of a Japanese yen-denominated Tokutei Mokuteki Kaisha bond with a new onshore banking relationship in Q2 FY23.
This is a very frequently used technique by trading houses when they want to take position In any shares , there is no negative news buy calls generated by dbs and other banks
Majority of shares are with general public.
So if big trading houses want to take position they first short the shares and bring down the prices so that it triggers stop loss sell for some and some panic and sell
That's when they take position
I believe if you keep invested long term and no one is selling the price will go up automatically
They are just creating panic among general public who hold the stock
current exchange rate about
1 Singapore Dollar equals
11,261.86 Indonesian Rupiah
so sad another S reits under attack
big boys are dumping
big boys are dumping
Gone case....
any idea why the price drop to 22.5 cents ?
What is the benefit or effects for the manager to be issued shares for their fee?
Is this a good thing, though I interpret as to have them vested in First Reit?
Is this a good thing, though I interpret as to have them vested in First Reit?
Lim & Tan keeps &lsquo buy&rsquo call on First REIT as it sees it benefitting from Siloam&rsquo s strong performance
Lim & Tan analyst Chan En Jie is keeping his &ldquo buy&rdquo call on First REIT AW9U -1.89% with a target price of 30 cents after the REIT&rsquo s revenue and distributable income for the 1HFY2023 ended June 30 came in line with his expectations.
On Aug 1, the manager reported a distribution per unit (DPU) of 1.24 cents, 6.1% lower y-o-y. 1HFY2023 revenue rose by 0.4% y-o-y to $54 million while distributable income rose 1.0% y-o-y to $25.5 million.
&ldquo Management has shared that [its] quarterly distributions of 62 cents per unit is sustainable even with another two 25 basis points (bps) rate hikes this year. First REIT&rsquo s yield spread of 4.2% remains attractive relative to its other healthcare peers&rsquo yield spread of under 2%,&rdquo writes Chan.
His target price of 30 cents is pegged to a forward yield spread of 2.8% or 0.5 standard deviation (s.d.) of its five-year average.
In his report dated Aug 4, Chan is positive on the progress of the REIT&rsquo s execution of its 2.0 growth strategy. The REIT first unveiled its &ldquo 2.0 growth strategy&rdquo in December 2021 where it aims to diversify into developed markets, strengthen its capital structure, reshape its portfolio for capital efficient growth and finally, pivot to ride on the megatrends such as environmental, social and governance (ESG).
&ldquo First REIT managed to strengthen its capital structure by completing the early refinancing of the Japan-Yen TMK bond due May 2025 till 2030. Floating interest rates of [around] 1.2% previously are now locked in at 1.5% fixed rates. The proportion of total debt on hedged or fixed rates now stands at 86.0% as of end 1HFY2023, a sharp increase from 59.6% at end-FY2022,&rdquo Chan notes.
&ldquo After this refinancing, weighted average debt to maturity lengthened from 3.4 years to 4.1 years and gearing stands at 38.7% at a healthy 4.1x interest coverage ratio. All-in cost of debt is at 4.9%, an increase from 3.7% at end-FY2022 and we expect it to remain elevated through 2023 but will be partly shielded by First REIT&rsquo s reduction of floating-rate debt,&rdquo he adds. &ldquo While First REIT continue its inroads into developed markets, possible locations include Australia and the acquisition of additional Japan nursing homes.&rdquo
In addition, Chan sees that the REIT is well positioned to the reap the benefits of the strong performance from Siloam Hospitals in Indonesia.
&ldquo Under First REIT&rsquo s agreement with Siloam Hospitals, First REIT will receive the higher of base rent escalation of 4.5% or a performance-based rent of 8.0% of each hospital&rsquo s preceding year&rsquo s gross operating revenue. This implies that if First REIT&rsquo s Indonesia assets does well, First REIT will stand to reap the benefits,&rdquo he notes.
&ldquo We understand that out of its 14 hospital assets in Indonesia, three hospitals are currently on the performance-based rent scheme. Siloam has reported strong growth momentum and higher patient volumes with its 1HFY2023 revenue/profits growing by 19.1%/142.5% respectively,&rdquo he adds.
&ldquo With a resilient outlook expected for Siloam, we think it is only a matter of time before more of First REIT&rsquo s assets shift towards the performance-based rent scheme and provide an uplift to rental income,&rdquo continues Chan.
First Reit posts 6.1% drop in H1 DPU on higher finance costs, one-off increase in unit base
FIRST : AW9U 0% Reit : AW9U 0%&rsquo s distribution per unit (DPU) fell 6.1 per cent to S$0.0124 for its first half ended June, from S$0.0132 the year before, even as distributable income rose.
The manager attributed the drop in DPU to higher financing costs, currency translation impact and a one-off increase in the real estate investment trust&rsquo s (Reit) unit base, the manager said on Tuesday (Aug 1).
The Reit issued 431.1 million new units in March 2022 to partially fund the acquisition of 12 Japan nursing homes.
Rental and other income for the first half inched up 0.4 per cent on the year to S$54 million from S$53.8 million. This was mainly due to a full half-year rental contribution from the 12 Japan nursing homes and two other Japan nursing homes acquired in September 2022.
First Reit also registered rental income growth across its Singapore and Indonesia portfolios, which include Siloam Hospitals Yogyakarta. However, this was partially offset by the depreciation of the yen and rupiah against the Singapore dollar during the half-year period.
Net property and other income dipped 0.6 per cent on the year to S$52.4 million for the half year, from S$52.7 million as property expenses rose.
The new Japan portfolio prompted a 45.5 per cent year-on-year increase in the Reit&rsquo s property operating expenses to S$1.6 million from S$1.1 million.
Finance costs for H1 rose 22.6 per cent to S$11.2 million from S$8.4 million in the previous corresponding period on higher borrowings and interest rate hikes.
Distributable income for the half year amounted to S$25.5 million, up 1 per cent from S$25.3 million in the same period the previous year.
A DPU of S$0.0062 for the second quarter will be paid out on Sep 25 after book closure on Aug 10. Distributions for Q1, which were also S$0.0062 per unit, were paid on Jun 26.
As at end-June, the Reit&rsquo s gearing levels stood at 38.7 per cent, and its weighted average lease expiry was 12 years on a gross floor area basis. The Reit also recorded full committed occupancy.
Nursing homes in Japan and Singapore now comprise more than one-quarter of its assets under management (AUM), said Victor Tan, executive director and chief executive of First Reit&rsquo s manager.
&ldquo We remain committed towards growing our developed markets portfolio to more than half of the trust&rsquo s AUM by FY2027,&rdquo he added.
Attended the REITS Symposium today, queity confident it should pick up henceforth.
Will be buying some for LT and its resurrection. Beside, the yield looks yummy at current price.
Going to be vested soon.
Will be buying some for LT and its resurrection. Beside, the yield looks yummy at current price.
Going to be vested soon.
JustOnce ( Date: 12-May-2023 13:35) Posted:
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I am one such retard.
jebuscries ( Date: 04-Apr-2023 10:54) Posted:
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Any shareholders still holding the bag since its $1 days? Just wondering if there were other retards like myself who didn' t cut loss and sell.
First REIT reports FY2022 DPU of 2.64 cents, up 1.1%
First REIT AW9U 1.82% has reported a distribution per unit (DPU) of 0.66 cents for the 4QFY2022 ended Dec 31, 2022, unchanged q-o-q since the 1QFY2022. The quarterly DPU, which also stood unchanged from the same period the year before, is payable on March 30.
This brings the trust&rsquo s FY2022 DPU to 2.64 cents, 1.1% higher than the DPU of 2.61 cents in FY2021.
Rental and other income for the FY2022 increased by 8.7% y-o-y to $111.3 million mainly due to the contribution from the trust&rsquo s newly-acquired properties in Japan. Of the 14 properties, 12 were acquired in March and two were acquired in September 2022. Higher income from the trust&rsquo s Singapore and Indonesia properties also contributed to the higher revenue.
Rental and other income for the 2HFY2022, however, fell by 9.3% y-o-y to $57.5 million mainly due to the full year 2021 straight-lining adjustments of $22.7 million that were recognised in 2HFY2021.
Net property and other income for the FY2022 increased by 8.3% y-o-y to $108.6 million in line with the new revenue. The higher net property and other income also rose as the new Japan properties more than offset the higher property operating expenses.
Distributable income rose by 24.4% y-o-y to $52.4 million.
As at Dec 31, 2022, the trust&rsquo s weighted average lease expiry (WALE) stood at 12.5 years on a gross floor area (GFA) basis.
As at Dec 31, 2022, the trust&rsquo s gearing stood at 38.5% with an interest coverage ratio of 5.0 times. Its debt maturity profile also improved with no debt refinancing requirements until FY2025.
The trust has also pegged 59.6% of its debt on fixed rates, and entered into non-deliverable forward contracts and call spreads to hedge net cashflow from Indonesia.
See also: Pec reports 43% lower 1HFY2023 earnings of $2.9 mil wins $128 mil worth of new contracts
Following its Japan acquisition, the trust&rsquo s developed markets portfolio has increased to 25.1% of assets under management (AUM), making it on track to meet its target of 50% by FY2027.
Cash and cash equivalents as at end-December stood at $46.1 million.
&ldquo With First REIT&rsquo s balanced portfolio of 32 high-quality healthcare and healthcare-related assets in developing and developed markets, the trust has been able to deliver stable and sustainable growth. Although global inflationary pressures, rising interest rates, exchange rate volatility, and geopolitical risks have resulted in a challenging real estate investment environment, we will continue to harness First REIT&rsquo s 2.0 growth strategy to enhance the resiliency of our distributions to unitholders, while also delivering positive social impact,&rdquo says Victor Tan, executive director and CEO of the manager.
- 1 -
PRESS RELEASE
For Immediate Release
FIRST REIT&rsquo S FY 2022 DPU RISES 1.1% TO 2.64 CENTS,
CONTINUES STABLE QUARTERLY DPU OF 0.66 CENTS IN 4Q 2022
&bull Developed markets portfolio increases to 25.1% of AUM1 after acquisition of 14 Japan nursing
homes on track to meet target of 50% by 2027
&bull No refinancing requirements until May 2025 after early refinancing exercise in November 2022
through the entry into S$300 million social term loan and revolving credit facilities
&bull 59.6% of debt on fixed rates as at 31 December 2022, and mitigated Indonesian Rupiah FX risk with
financial derivatives
PRESS RELEASE
For Immediate Release
FIRST REIT&rsquo S FY 2022 DPU RISES 1.1% TO 2.64 CENTS,
CONTINUES STABLE QUARTERLY DPU OF 0.66 CENTS IN 4Q 2022
&bull Developed markets portfolio increases to 25.1% of AUM1 after acquisition of 14 Japan nursing
homes on track to meet target of 50% by 2027
&bull No refinancing requirements until May 2025 after early refinancing exercise in November 2022
through the entry into S$300 million social term loan and revolving credit facilities
&bull 59.6% of debt on fixed rates as at 31 December 2022, and mitigated Indonesian Rupiah FX risk with
financial derivatives
First REIT renews master lease agreement with Imperial Aryaduta Hotel & Country Club in IPT
PT Karya Sentra Sejahtera (PT KSS), an indirect wholly-owned subsidiary of SGX-listed First REIT, has entered into a master lease agreement with PT Lippo Karawaci Tbk on Dec 22, where the lease with Imperial Aryaduta Hotel & Country Club is renewed.
The rent payable for the term is fixed at IDR20.24 billion ($1.76 million). The amount will be paid in rupiah and quarterly in advance.
The aggregate value of the renewed agreement is $1.8 million which is approximately 0.3% of the net tangible asset (NTA) and net asset value (NAV) of the NTA and NAV of First REIT as at Dec 31, 2021.
According to the independent valuation report conducted by Colliers International Consultancy & Valuation (Singapore) Pte Ltd, in collaboration with KJPP Rinaldi Alberth Baroto & Partners and commissioned by First REIT&rsquo s manager and trustee, the rental rate is &ldquo reasonable&rdquo and &ldquo in line&rdquo with the market rate.
Under the renewed lease, PT Lippo Karawaci Tbk is required to pay to and maintain with PT KSS a security deposit equivalent to three months&rsquo worth of the monthly rent.
The new lease term will begin on Jan 1, 2023, and end on Dec 31, 2023.
Imperial Aryaduta Hotel & Country Club is an upscale resort located just outside Jakarta, Indonesia.
Under the renewed lease agreement, PT KSS has the right to terminate the lease for any reason with a written notice of at least six months.
Should PT Lippo Karawaci Tbk need to extend its lease and term expiry date, it just has to give a written notice to PT KSS 14 weeks before the term&rsquo s expiry date or before.
According to First REIT&rsquo s manager, the Imperial Aryaduta Hotel & Country Club was identified as a &ldquo non-core asset&rdquo . The manager had previously appointed PT Rantaka Haburi Radika and PT Colliers International Indonesia to procure a suitable purchaser for the resort since May 2021. There are no suitable prospects so far as at Dec 22.
According to the manager, it intends to continue to market the resort for divestment. It believes that it is &ldquo prudent to continue to have in place a short-term lease in line with market terms while this process remains ongoing&rdquo .
&ldquo The renewed lease provides some revenue stability from Imperial Aryaduta Hotel & Country Club while still allowing the manager strategic flexibility to divest Imperial Aryaduta Hotel & Country Club should the opportunity arise,&rdquo reads the statement released by the manager.
Due to the relationship between First REIT and PT Lippo Karawaci Tbk and due to the value of the transaction, the renewal constitutes as an interested person transaction (IPT) under SGX&rsquo s listing rules.
Healthcare S-Reits capture Japan opportunities with expanding footprint
First REIT now has 14 out of its 32 Asian healthcare assets in Japan nursing homes. PHOTO: FIRST REIT
THERE are two actively traded healthcare related S-Reits, namely ParkwayLife Reit : C2PU +1.6% and First Reit : AW9U +2.04%. Both ParkwayLife Reit (37.1 per cent of its asset value) and First Reit (22.8 per cent of its assets under management) have significant exposure to Japan nursing homes and healthcare-related properties through recent acquisitions.
With Japan being the world&rsquo s second largest healthcare market and a third of its population aged 65 and above, which is highest globally, it is no wonder that nursing homes and facilities are a growing focus for the two healthcare S-Reits.
ParkwayLife Reit acquired five nursing homes in September 2022, with three in the Hokkaido region and two in the Greater Tokyo region. All properties acquired were 11.1 to 12.2 per cent below valuation and have an overall net property yield of 5.2 to 6.5 per cent. The Reit now has 57 nursing homes in Japan worth S$872.9 million as at Dec 31, 2021 across 17 prefectures and a tenant base across 30 nursing home operators.
The properties have a long-term lease structure with weighted average lease term to expiry (Wale) of 12.4 years. Approximately 95.7 per cent of ParkwayLife Reit&rsquo s revenue from its Japan portfolio is downside-protected.
As part of First Reit&rsquo s 2.0 Growth Strategy, the Reit marked its maiden entry into Japan in March 2022 with the acquisition of 12 freehold nursing homes from its sponsor OUE Lippo Healthcare. It continued to acquire two more freehold nursing homes from third parties in September 2022. First Reit now has 14 out of its 32 Asian healthcare assets in Japan nursing homes which are operated by five independent and experienced nursing home operators.
As a result of its expanded footprint, First Reit&rsquo s rental and other income for 9M 2022 increased 39.2 per cent year on year to S$80.9 million. Its distribution per unit also increased 1.5 per cent year on year to 1.98 cents.
Its entry into Japan also increased its proportion of assets under management (AUM) from developed markets to 25.6 per cent as at Sep 30, 2022. First Reit intends to focus growth in developed markets with a target to reach over 50 per cent of AUM in these markets by 2027. Its overall portfolio has a Wale of 12.7 years, a combined AUM of S$1.2 billion as at Sep 30.
Victor Tan, chief executive officer of First Reit&rsquo s manager notes that Japan is one of the Reit&rsquo s key growth markets and its continued expansion into Japan will position the Reit for long-term growth with stability.
Generally, healthcare Reits invest in income-producing real estate primarily used for healthcare related purposes including but not limited to hospitals, medical offices, outpatient facilities and nursing facilities. As such, these Reits may be seen as a way for investors to gain exposure to the growing and resilient healthcare sector.
First Reit completes early financing for 50.6% of debt after trustee enters facility agreement
FIRST Real Estate Investment Trust (Reit) : AW9U +2.08% trustee Perpetual (Asia) has entered into a facility agreement with OCBC and CIMB Singapore as original lenders in terms of a term loan facility of S$225 million and a revolving credit facility of S$75 million, the Reit manager announced in a press statement on Friday (Nov 25).
Proceeds from the facilities will go towards refinancing an existing S$260 million term and revolving credit facilities due in March 2023, with an outstanding debt of S$225.7 million. The existing loan represents 50.6 per cent of First Reit&rsquo s total debt as at Sep 30.
With the entry into the new facilities, the Reit&rsquo s next refinancing requirement is when 10.7 billion yen (S$105.6 million) of TMK bonds of debt is due in May 2025.
&ldquo Proceeds from the new facilities will also be applied towards the financing or refinancing of eligible social assets in accordance with First Reit&rsquo s Social Finance Framework,&rdquo said the Reit manager.
OCBC and CIMB Singapore said the proceeds of the social loan will be directed towards the Reit&rsquo s healthcare assets that will create positive social impact through improving the quality of and access to healthcare services in Indonesia.
The Reit manager added that post-refinancing, on a pro forma basis as at Sep 30, First Reit&rsquo s gearing ratio will remain stable at around 35.6 per cent, while weighted average debt to maturity will improve to 3.64 years from 1.99 years. The proportion of debt tied to delivering social impact will also rise to 76.7 per cent, from 26.1 per cent as at Sep 30.
More than one-quarter of First Reit&rsquo s assets under management are in developed markets, factoring recent acquisitions in Japan, noted Victor Tan, executive director and chief executive officer of the manager.
&ldquo Given our healthy financial position and with no near-term loan refinancing requirements on the horizon, First Reit is well-placed to further grow our developed markets portfolio to more than 50 per cent of assets under management by 2027,&rdquo he said.
Elaine Lam, head of global corporate banking at OCBC, said the loan &ldquo is in line with our goal to create lasting value for the communities we serve, and to help drive sustainable development across our core markets&rdquo .
Victor Lee, CEO of CIMB Bank Singapore, added: &ldquo Putting our customers and communities at the core of what we do has always been our ethos and aligns with our sustainability commitment to maximise positive impact through sustainable finance.&rdquo
SAC Capital ' optimistic' about First REIT after acquisition of 14 nursing homes in Japan
First REIT&rsquo s new growth strategy, which saw it acquire 14 nursing homes in Japan this year, is executing well, says SAC Capital analyst Yeo Peng Joon.
&ldquo We are optimistic about the prospects of First REIT. The restructuring in 2020 marked a significant milestone in its next chapter and set the stage for its 2.0 growth strategy,&rdquo writes Yeo.
In a Nov 16 note, Yeo maintained his &ldquo buy&rdquo call on First REIT with a target price of 33 cents. This prices First REIT at FY2022 P/B of 0.8x and distribution yield of 10.4%.
This year, First REIT made its maiden foray into the developed world. In Japan, First REIT owns a total of 14 nursing homes, which takes up 24% of their total assets under management (AUM). It intends to lift that number to more than 50% by 2027.
In addition, it has the balance sheet to do so, says Yeo. &ldquo Currently, the gearing for First REIT is 36%. If the Group gears up to 40% and 45%, it will give them about $100 million and $200 million headroom respectively to acquire more properties.&rdquo
The yield from these Japanese properties are less than Indonesia and Singapore. However, due to the low cost of funding from the Japanese yen, the yield spread is similar, hence contributing to distribution per unit (DPU) positively, says Yeo.
The REIT has hedged against the volatility in borrowing cost through swaps and caps, bringing the fixed portions to 61.7%, as compared to 22.5% if without.
$225.7 million of the term loan is set to be refinanced in March 2023 where negotiations are ongoing. After refinancing the term loan, First REIT need not worry about future refinancing of bonds and loans as the next debt maturing will be about two years later, in May 2025, writes Yeo.
The strategic divestment of Surabaya, completed in September 2022, partially funded First REIT to buy back 45% of the $60 million 4.98% perpetual notes. This tender offer generated an interest saving of $1.3 million.
The REIT&rsquo s weighted average debt to maturity has increased to two years.
First REIT reported its 3QFY2022 business update on Nov 8. 3QFY2022 net property income (NPI) increased to $24.1 million, up 26% q-o-q while distributable amount rose to $13.7 million, up 31% q-o-q.