First Reit Q1 DPU flat at 2.15 Singapore cents

FIRST Real Estate Investment Trust (First Reit) on Wednesday reported a flattish distribution per unit (DPU) of 2.15 Singapore cents for the first quarter ended March 31, on the back of a 114.8 per cent increase in property expenses, mainly incurred for Sarang Hospital and Indonesia properties.

Distributable income was 0.9 per cent higher year-on-year at S$17.1 million from S$16.8 million, according to the financial results for Q1FY19 released after the stock market closed. 

The DPU will be paid on May 30.

Rental and other income (or gross revenue) dipped marginally by 0.2 per cent to S$28.6 million, mainly due to lower variable rent al component for Indonesia properties. But net property income posted a 1.4 per cent decline to S$28 million, predominantly due to higher property expenses. Property expenses for the quarter increased by 114.8 per cent to S$623,000 compared to S$290,000 in 1Q 2018, mainly due to higher property expenses incurred for Sarang Hospital and Indonesia properties.

Net asset value per unit for the group as at March 31 stood at S$1.0227, marginally lower than S$1.0251 three months ago.

Gearing remained steady at 34.5 per cent as at end-March.

First Reit's manager is Bowsprit Capital. Chief executive officer of Bowsprit Capital Victor Tan said the trust will continue to explore opportunities to unlock the value of its existing portfolio through asset enhancement initiatives or strategic divestment of assets for capital gains.

"With OUE and OUE Lippo Healthcare on board, we will also look at diversifying our income streams by expanding into other geographical markets," he added.

Last year, OUE and OUE Lippo Healthcare completed the acquisition of Bowsprit, and OUELH also completed the acquisition of 83.6 million First Reit units, representing 10.6 per cent of the total unitholdings of First Reit.

Separately, Bowsprit announced the retirement of First Reit's non-independent non-executive director 64-year-old Ketut Budi Wijaya. Mr Wijaya was a member of the nominating and remuneration committee. Minny Riady, 57, has been appointed to replace him on the board and the committee. These take effect on Wednesday.

Ms Riady is the sister of James Tjahaja Riady and Stephen Riady, who are substantial unitholders of First Reit and substantial shareholders of Bowsprit.

First Reit closed down 0.5 Singapore cent or 0.5 per cent to end at 99 Singapore cents on Wednesday.