SINGAPORE (Oct 14): CIMB is keeping its “add” call and target price of $1.48 on First REIT, on Q315 numbers that came in within expectations. The REIT, which owns hospitals in Indonesia, posted a 6.2% y-o-y increase in distributable income to $15.6 million. Distribution per unit was 2.08 cents.

CIMB likes First REIT for its “strong and visible” inorganic growth prospects, as there is a busy pipeline of more than 40 hospitals now under its sponsor, Lippo Karawachi, which the REIT can potentially acquire down the road.

The REIT’s current gearing of 32.9% means it has an additional room to take on $216 million in debt to fund acquisitions before hitting the revised limit of 45%. Meanwhile, First REIT has already started on so-called asset enhancement initiatives to boost the value of its properties. “We believe that potential yield accretive acquisition from its sponsor as well as asset enhancement activities will act as strong rerating catalysts,” states CIMB in its Oct 14 report.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Related Stories

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook