First REIT's 2H FY23 Result Review
Basic Profile & Key Statistics
Key Indicators
Performance Highlight
Gross revenue and NPI declined YoY mainly due to the depreciation of foreign currencies against SGD. Coupled with higher finance costs, distributable amounts and DPU have declined as well.
ESG Initiative
In 2023, FIRST REIT committed a capex of S$1.12 million for energy-efficient installations for 14 properties.
Related Parties Shareholding
The REIT sponsor, REIT manager, and directors of the REIT manager hold a relatively high proportion of shareholding.
Lease Profile
Committed occupancy stands at 100%, with a long WALE and no major lease expiry within 4 years. Additionally, the proportion of income in SGD and major currencies is low.
Debt Profile
The debt profile presents a mixed picture: there's a relatively high interest coverage ratio, a significant proportion of fixed-rate debt, and a relatively long WADM. However, the cost of debt is high, the proportion of unsecured debt is relatively low, and there's a concentration on debt maturity.
Diversification Profile
The portfolio shows diversity in geographical locations and properties, but there is a notable concentration among tenants.
Key Financial Metrics
Property yield and operating distributable income on capital are high. However, the manager's management fee is comparatively high compared to operating distributable income.
DPU Breakdown
TTM Distributable Income Breakdown:91.3% from Operation8.7% from Management Fees Paid in Units
Trends
Uptrend: Property Yield, Operating Distributable Income on Capital
Slight Uptrend: Adjusted Interest Coverage Ratio
Flat: Committed Occupancy
Slight Downtrend: Operating Distributable Income Margin
Downtrend: DPU from Operation, NAV per Unit
Relative Valuation
Dividend Yield - Average for 1y, 3y & 5y
P/NAV - Average for 1y, 3y & 5y
Author's Opinion
The 4Q performance is comparable to the previous quarter. The master lease of the Imperial Aryaduta Hotel & Country Club has been renewed up to 31 December 2024, with the possibility of a further one-year extension upon mutual agreement. Regarding debt, there is no refinancing requirement until May 2026.
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