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First Reit posts higher DPU in Q4, lifted by Kupang Property

CONTRIBUTION from the Kupang Property comprising Siloam Hospitals Kupang and Lippo Plaza Kupang acquired in December 2015, lifted First Reit's fourth quarter distribution per unit (DPU) to 2.13 Singapore cents, up from 2.09 cents a year ago.

For the three months ended Dec 31, 2016, the healthcare real estate investment trust's (reit's) distributable income rose 5.1 per cent year on year to S$16.5 million.

Revenue for the quarter went up 5.1 per cent to S$27 million, while net property income recorded a 5.2 per cent year-on-year growth to S$26.7 million.

Bowsprit Capital Corporation Limited, manager of First Reit, on Tuesday said in a filing to the local bourse that DPU for the full year came in at 8.47 cents, up 2 per cent - the highest annual distribution since listing and based on closing price as at Dec 30, 2016, of S$1.265, a yield of 6.7 per cent.

For FY2016, distributable income rose 5.4 per cent to S$65.2 million.

Correspondingly, revenue for the year grew 6.3 per cent year on year to S$107 million, while net property income climbed 6.6 per cent to S$105.8 million.

Ronnie Tan, Bowsprit's chief executive, said the performance was due to yield-accretive acquisitions.

"To this end, the trust has recently completed the acquisition of Siloam Hospitals Labuan Bajo in Indonesia, capping off the year with an enlarged portfolio of 18 properties and an increased asset base of S$1.27 billion. With this latest acquisition, unitholders can look forward to continued earnings growth in FY2017."

In its outlook, Bowsprit said with the influx of foreign players, there is a race by local players to shift gear in preparation for faster growth and continuous investments from the government, especially with the full implementation of the national health insurance scheme covering 260 million Indonesians by 2019.

"For First Reit, opportunities for further yield-accretive acquisitions in the healthcare sector remain strong with its right-of-first-refusal to the growing pipeline of 43 hospitals from its Sponsor, PT Lippo Karawaci Tbk," the group said.

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