First REIT reports 3Q19 net property income fell nearly 3 percent

Comprehensive Cancer Centre, in Central Jakarta, Indonesia, is part of First REIT's portfolio. Photo used with permission of OUE Lippo Healthcare.Comprehensive Cancer Centre, in Central Jakarta, Indonesia, is part of First REIT's portfolio. Photo used with permission of OUE Lippo Healthcare.

First REIT reported Wednesday its third quarter net property income fell 2.5 percent on-year to S$28.22 million on higher property expenses for the South Korean and Indonesian properties.

Rental and other income for the quarter ended 30 September fell 1.5 percent on-year to S$28.80 million on lower variable rental components for the Indonesian properties, the healthcare-focused REIT said in a filing to SGX.

The distribution per unit (DPU) for the quarter was 2.15 Singapore cents, unchanged on-year, the filing said.

For the nine-month period, First REIT reported net property income fell 1.5 percent on-year to S$84.59 million on rental and other income of S$86.44 million, down 0.5 percent on-year. The nine-month DPU was 8.60 Singapore cents, unchanged on-year, the REIT said.

The distribution represents a yield of 8.5 percent, based on the annualized DPU for the nine-month period and the unit closing price of S$1.01 on 30 September, the REIT said.

First REIT’s portfolio has 20 properties across Indonesia, Singapore an South Korea.

In its outlook, First REIT pointed to potential support ahead for the Indonesian economy from interest rate cuts and President Jokowi’s budget plan to raise spending.

“The healthcare market has been resilient in Indonesia and the Asia Pacific region, with the demand for healthcare being supported by positive demographic and socio-economic factors,” the REIT said.

“First REIT continues to be presented with opportunities for yield-accretive acquisitions from a strong pipeline of quality healthcare assets in Indonesia and across the Asia Pacific region. It enjoys a right-of-first-refusal for acquisitions from both its sponsors PT Lippo Karawaci Tbk and OUE Lippo Healthcare Limited, as well as acquisition opportunities from third parties,” the REIT said.

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