First REIT - 1Q17 results met our expectations
- First REIT (FREIT) reported a steady set of 1Q17 results which met our expectations.
- Gross revenue and NPI both rose 2.5% YoY to S$27.2m and S$26.9m, respectively, and formed 24.8% of our FY17 forecasts.
- Growth was driven largely by a full-quarter contribution from the acquisition of Siloam Hospitals Labuan Bajo, which was completed in Dec 2016. DPU edged up 1.4% YoY to 2.14 S cents, and was partly boosted by the REIT Manager’s decision to take 92.0% of its management fees in units (1Q16: 70.1%).
- 1Q17 DPU constituted 25.6% of our fullyear projection.
- Looking ahead, FREIT will continue to seek growth from Indonesia as its key focal market. This is supported by its right-of-first-refusal agreement with its sponsor, Lippo Karawaci, over its expanding pipeline of more than 40 hospitals.
- Maintain HOLD and S$1.32 fair value estimate on FREIT.