SINGAPORE (Apr 10): Bowsprit Capital Corporation, the manager of First Real Estate Investment Trust (First REIT), reported a distribution per unit (DPU) of 2.15 cents for the 1Q19 ended March, unchanged from a year ago.
On an annualised basis, the latest distribution translates to an attractive yield of 8.7%, based on its Mar 29 closing price of 99 cents.
For the quarter under review, gross revenue for 1Q19 decreased 0.2% to $28.6 million compared to 1Q18 mainly due to lower variable rental component for Indonesia properties.
Property operating expenses for 1Q19 more than doubled to $623,000 mainly due to higher property expenses incurred for Sarang Hospital and Indonesia properties.
Finance costs for 1Q19 increased to $5.1 million mainly due to higher interest costs on loans.
Other expenses decreased to $287,000 mainly due to absence of project expenses incurred in 1Q18.
The trust’s rental and other income, and net property income (NPI) registered a marginal 0.2% and 1.4% dip to $28.6 million and $28.0 million respectively, predominantly due to higher property expenses.
Distributable income edged up 0.9% year-on-year to $17.1 million.
As at March 31, gearing remained steady at 34.5%, giving the REIT ample headroom for further yield-accretive acquisitions.
Manager Bowsprit says Asia Pacific healthcare market is on track to achieve unprecedented growth with total healthcare spending projected to surge to US$2.3 trillion by 2026 from US$1.7 trillion in 2017, outpacing growth in the United States and Europe.
The growth will largely be driven by higher healthcare costs, rising incidence of chronic diseases and an ageing population.
In Indonesia, demand for private healthcare continues to rise with the growing nationwide adoption of the national health insurance scheme and healthcare spending in Indonesia has been projected to rise to Rp1,224 trillion by 2027.
“Going forward, the trust will continue to explore opportunities to unlock the value of our existing portfolio through asset enhancement initiatives or strategic divestment of assets for capital gains. With OUE and OUE Lippo Healthcare (OUELH) on board, we will also look at diversifying our income streams by expanding into other geographical markets,” says Victor Tan, CEO of Bowsprit.
Units in First REIT closed 0.5 cent lower at 99 cents on Wednesday.
