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New acquisitions lift First Reit's Q1 distributable income by 6.2% to S$16.2m

BOWSPRIT Capital Corporation Ltd, manager of First Reit, on Monday said the trust recorded a 6.2 per cent year-on-year rise in distributable income to S$16.2 million for the first three months of the year, lifted by new acquisitions.

This translates to a distribution per unit (DPU) of 2.11 Singapore cents in its first-quarter results, up 2.4 per cent year on year. It will be paid on May 30.

Based on annualised DPU of 8.49 Singapore cents and closing price of S$1.23 on March 31, the trust maintained a healthy annualised distribution yield of 6.9 per cent, Bowsprit said.

Revenue for the quarter came in at S$26.5 million, up 7.1 per cent, mainly due to the contribution from Kupang Property.

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Net property income grew 8.1 per cent to S$26.2 million year on year.

Ronnie Tan, Bowsprit's CEO, noted that this is the real estate investment trust's seventh consecutive rise in DPU since achieving its record DPU of 2.00 Singapore cents in Q2 2014.

"The growth was achieved on the back of new acquisitions, specifically from our latest acquisition in December 2015, the Kupang Property, comprising Siloam Hospitals Kupang and Lippo Plaza Kupang."

Dr Tan added that the trust has recently announced its proposed joint acquisition of an integrated development in Yogyakarta, with Lippo Malls Indonesia Retail Trust.

He said with the completion of this acquisition, "unitholders can look forward to continuing DPU growth".

In its outlook, the manager said economic growth in Indonesia picked up speed in the last quarter of 2015, driven by government spending on infrastructure.

To further boost growth, Indonesia's central bank cut its main interest rate for the third consecutive month in March 2016 amid the strengthening rupiah.

The Indonesian government also unveiled plans to loosen restrictions on foreign ownership of businesses in various sectors including the lifting of the ban on foreign ownership in healthcare-related businesses, Bowsprit noted.

"This is expected to further spur the expansion of the healthcare sector, which is already seeing increasing demand for healthcare services and hospital beds with the introduction of Jaminan Kesehatan Nasional, the national health insurance scheme by the Indonesian government since 2014," the manager added.

The stock closed down half a cent to S$1.25 before the results were released.