Brokers' take

First Reit | Buy Target price: S$1.44 Oct 24 close: S$1.38 OCBC Investment Research, Oct 24

First Reit has completed the acquisition of Siloam Hospitals Buton and Lippo Plaza Buton for a consideration of S$28.5 million on Oct 10, 2017. We believe this transaction will be DPU-accretive from Q4 '17 onwards, and have duly incorporated this into our model.

Separately, First Reit is also seeking to conduct a joint acquisition of a DPU-accretive integrated development in Yogyakarta. While these should wrap up transactional activity in 2017 nicely, we believe that more could be in store for 2018. Based on our estimates, First Reit's gearing level of 32.6 per cent as at Sept 30, 2017 should translate into around S$172 million of debt headroom before reaching 40 per cent, which should comfortably support potential acquisitions from its sponsor's pipeline of about 40 hospitals. Positive base…