First REIT

First REIT: Share price is at its 1½ year high of $1.27, taking its year-to-date return to ~18%. The healthcare REIT was featured in The Edge Daily today, where the magazine highlighted the record distribution of 2.02¢ paid in the group’s latest 3Q14 results. The strong earnings performance was led by full contribution from the group’s latest acquisition, Siloam Hospital Purwakarta, and the REIT had guided that Joko Widodo’s victory at the recent presidential elections bodes well for Indonesia’s 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 over which First REIT has the right-of-first-refusal. Outside of Indonesia, First 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 6.4% 3Q14FY yield and 1.3x P/B versus closest peer ParkwayLife REIT’s of 4.8% forward yield and 1.5x P/B.