Tuesday, October 27, 2009

First REIT announces distribution

First REIT maintains stable 3Q 2009 distributable income at S$5.2 million
 DPU for the period at 1.90 cents per unit
 Annualised DPU of 7.62 Singapore cents translates to distribution yield of 10.7%
 Committed to maintaining a payout policy of 100% of distributable income for FY 2009

SINGAPORE – 22 October 2009 – Bowsprit Capital Corporation Limited ("Bowsprit"), the Manager of First Real Estate Investment Trust ("First REIT"), Singapore’s first healthcare real estate investment trust, today reported that its distributable income for the third quarter ended 30 September 2009 amounted to S$5.2 million which was similar to that achieved in the corresponding period last year.

Correspondingly, 3Q 2009 distribution per unit ("DPU") remained steady at 1.90 Singapore cents. Based on its closing price of S$0.715 on 20 October 2009 and the annualised DPU of 7.62 Singapore cents, First REIT registered a healthy distribution yield of 10.7% for the period.

Gross revenue and net property income also remained stable at S$7.6 million and S$7.5 million respectively as compared to the previous corresponding period.

Reflecting substantially lower market interest rates for fixed deposits, the Group’s interest income for 3Q 2009 decreased 85.4% to S$7,000, whilst trustee fees and finance costs grew by 11.1% and 28.5% respectively. Increase in finance costs was due to higher interest cost for the loan facility which was refinanced in June 2009.

Looking ahead

Improving stock markets and consumer demand are encouraging signs which point to a global economic recovery. With the general credit environment easing, a large part of the REIT sector in Singapore has been successful in their debt refinancing.

The Government’s recent push to raise awareness and boost palliative care services should help to boost the demand for private nursing care.

Bowsprit’s Chief Executive Officer, Dr Ronnie Tan, said "Our performance for the latest quarter continues to reinforce the stability of our Trust structure, which has cushioned us from the effects of the global financial crisis. In particular, we have seen stronger occupancy in our three Indonesians hospitals as more patients stayed back to seek medical care instead of travelling abroad. Continuing growth in this sector will provide an upside potential for First REIT as our Indonesian assets enjoy a variable rental growth component in addition to annual escalation.

In Singapore, demand for private nursing care continues to grow steadily with its aging population.

As First REIT faces no refinancing needs until 2012 and is well funded to meet anticipated growth, we expect the Trust’s performance to remain relatively stable and poised for improvement."

Balance sheet remains strong with a debt gearing of 15.6% which is significantly lower than the regulatory limit of 35%. This provides First REIT with headroom to pursue acquisition opportunities and carry out further asset enhancement works.

First REIT has received approval from the relevant authorities for comprehensive asset enhancement works for its Adam Road Hospital and is expected to commence work soon. Plans are also being proposed for extension works to Lentor Residence.

First REIT will continue its on-going review of the financial attractiveness of various projects in the pipeline, such as the Tech-Link healthcare logistics and distribution centre in Singapore which has received its temporary occupation permit on 2 September 2009.

Books Closure and Distribution Payment

First REIT’s Books Closure and Distribution Payment dates for 3Q 2009 payout of 1.90 Singapore cents are 2 November 2009 and 26 November 2009 respectively.

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