First REIT

First REIT: First REIT’s 4Q13 results was in-line with bullish expectations, as 4Q13 DPU at 1.97¢ (+15% y/y, +1% q/q) took FY13’s DPU to 7.52¢ (+14%), translating to a yield of 7.2%. Gross revenue and net property income grew 48% and 42% y/y respectively to $22.8m and $21.7m during the quarter, led by contributions from the two newly acquired properties, namely the Siloam Hospitals Bali and Siloam Hospitals TB Simatupang (SHTS). Having achieved its target asset value of over $1b in FY13, First REIT will continue to expand its footprint in Indonesia and explore asset enhancement initiatives going forward, where the Indonesian government has recently launched a universal healthcare program which provides healthcare insurance for all its citizens, inherently leading to a rise of demand for healthcare services. Outside Indonesia, the REIT aims to continue searching for more yield-accretive and quality healthcare assets in Asia to expand and diversify its portfolio. Overall, First REIT’s balance sheet remains healthy, with net-gearing at just 26%, giving further headroom to take on debt. At its current share price, First REIT trades at 7.2% FY13 yield and 1.1x P/B versus closest peer ParkwayLife REIT’s of 4.7x yield and 1.5x P/B.