First REIT's 2H FY24 Result Review

$First Reit(AW9U.SI)$

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

First REIT reported a YoY decline in gross revenue, NPI, distributable amount, and DPU, primarily due to the depreciation of the Indonesian Rupiah and Japanese Yen against SGD. This was partially offset by higher rental income from Singapore properties. The distributable amount and DPU declined at a lower rate, mainly due to adjustments related to rental straight-lining.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Favorable

• REIT Manager's Shareholding: Favorable

• Directors of REIT Manager's Shareholding: Favorable

Lease Profile

• Committed Occupancy: Favorable

• Income Received in SGD/Major Currencies: Less Favorable

• Highest Annual Lease Expiry in 4 Years: Favorable

• WALE: Favorable

• Weighted Average Land Lease Expiry: Moderate

Debt Profile

• Adjusted Interest Coverage Ratio: Favorable

• Cost of Debt: Less Favorable

• Gearing Ratio: Moderate

• Fixed Rate Debt Proportion: Less Favorable

• Unsecured Debt Proportion: Less Favorable

• Highest Annual Debt Maturity in 4 Years: Less Favorable

• WADM: Moderate

Diversification Profile

• Top Geographical Weightage: Favorable

• Top Property Weightage: Moderate

• Top 5 Properties' Weightage: Favorable

• Top Tenant Weightage: Moderate

• Top 10 Tenants' Weightage: Less Favorable

Key Financial Metrics

• Property Yield: Favorable

• Operating Distributable Income over Manager's Fees: Less Favorable

• Operating Distributable Income on Capital: Favorable

• Operating Distributable Income Margin: Favorable

• Operating Distribution Proportion: Moderate

DPU Breakdown

• TTM Distribution Breakdown:91.1% from Operation8.7% from Management Fees Paid in Units0.2% being Retained

Trends (Up to 10 Years)

• Uptrend: Property Yield

• Slight Uptrend: Operating Distribution Proportion

• Flat: Committed Occupancy, Top 10 Tenants' Weightage

• Slight Downtrend: None

• Downtrend: DPU from Operations, NAV per Unit, Adjusted Interest Coverage Ratio, Top 5 Properties' Weightage, Operating Distributable Income over Manager's Fees, Operating Distributable Income on Capital, Operating Distributable Income Margin

Price Range & Relative Valuation Metrics

• Dividend Yield: Below -1SD for 1y, 3y; Average for 5Y & 10y

• P/NAV: Above +1SD for 1y, 3y & 5y; Above +2SD for 3y; Average for 10y

Author's Opinion

Performance has weakened compared to the previous half-year. However, PT Metropolis Propertindo Utama's outstanding rental has been reduced from S$7.9 million to S$4.6 million. On the debt front, there are no refinancing requirements until May 2026.

Additionally, in January, First REIT's manager received a preliminary non-binding letter of intent from PT Siloam International Hospitals Tbk to potentially acquire its hospital assets in Indonesia. Further details will be provided if there are material developments.

For more information, check out REIT-TIREMENT

*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decision.