First REIT has taken a battering during 1H2020 as Covid-19 ravages property markets. Rent reliefs to beleaguered tenants and uncertainty over master leases have done the trust no favours. Still, CGS-CIMB analysts Lock Mun Yee and Eing Kar Mei have reiterated their “add” call on the counter due to its attractive dividend potential and geographical diversification. 

The counter reported a 33% y-o-y decline in 1H2020 gross revenue to $38.6 million, in part due to $19.6 million worth of rent relief offered to all its tenants in Indonesia, Singapore and South Korea for May and June 2020. All property tax rebates received by First REIT will be passed on to its three Singaporean tenants. Management is considering similar rent relief for 2H2020. 

As a result, the firm’s distribution income and distribution per unit (DPU) fell 46% and 46.5% y-o-y respectively. Distribution income came in at $18.4 million for 1H2020 while DPU stood at 2.30 cents. This DPU was below expectations for the CGS-CIMB analysts, coming in at just 27.2% of their FY2020 forecast. 

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