First REIT

First REIT: First REIT’s 3Q14 results were in-line with expectations. DPU came in at 2.02¢ (+7.0%), lifting 9M14 DPU to 6.01¢ (+8.3%). Gross revenue and net property income was up 4.6% and 7.9% respectively to $23.8m and $23.5m during the quarter, led by full contribution from the group’s latest acquisition, Siloam Hospital Purwakarta. Going forward, First REIT guides that Joko Widodo’s victory at the recent presidential elections bodes well for the Indonesian economy and in particular, the healthcare sector, with the government’s universal healthcare programme expected to be rolled out as planned. The group continues to see strong opportunities in the Indonesian healthcare sector and will tap on its sponsor, Lippo Karawaci’s strong pipeline for future acquisitions. Lippo Karawaci currently owns 18 hospitals under PT Siloam International Hospitals, with a pipeline of another 29 hospitals to which First REIT has the right-of-first-refusal for acquisition. Outside of Indonesia, the REIT aims to continue searching for more yield-accretive and quality healthcare assets in Asia to expand and diversify its portfolio. First REIT’s balance sheet remains healthy, with net-gearing at just 30.0%, providing further debt headroom for expansion. At the current share price, First REIT trades at an annualized 6.8% 3Q14FY yield and 1.25x P/B versus closest peer ParkwayLife REIT’s of 5.2% forward yield and 1.43x P/B.