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 Operation
• 8.7% 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.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.