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First REIT FY2023 DPU down 6.1% y-o-y to 2.48 cents

Bryan Wu
Bryan Wu • 3 min read
First REIT FY2023 DPU down 6.1% y-o-y to 2.48 cents
The REIT reported a DPU of 0.62 cents for 4QFY2022, unchanged from the three preceding quarters. Photo: First REIT
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First REIT AW9U -

has reported a distribution per unit (DPU) of 0.62 cents for the 4QFY2022 ended Dec 31, 2023, unchanged from the three preceding quarters, and payable on March 28.

This brings the trust’s FY2023 DPU to 2.48 cents, 6.1% lower than the DPU of 2.64 cents in FY2022.

The lower DPU was attributed to higher financing costs, a depreciation of the Indonesia Rupiah and the Japanese Yen against the Singdollar, and a one-off issuance of 431.1 million units in March 2022 to partially fund an acquisition of 12 nursing homes. 

The trust’s rental and other income dipped 2.4% y-o-y to $108.6 million in FY2023. However, excluding an adjustment on leasing standards, rental and other income would have increased 1.6% y-o-y to $93.4 million in FY2023 from $91.9 million in FY2022. 

This improvement was largely due to a built-in increment in rental income from Indonesia and Singapore, as well as a full-period contribution of rental income from 14 Japanese nursing homes.  

Net property and other income for FY2023 decreased 3.0% y-o-y to $105.3 million mainly due to full year property expenses incurred for Japan properties. Excluding the adjustment on rental straight-lining, net property and other income increased by 1.1% y-o-y to $90.1 million in FY2023.

See also: CapitaLand Ascendas REIT portfolio occupancy rate dips slightly to 93.3% for 1QFY2024

Distributable income for the full-year period decreased by 1.9% y-o-y to $51.4 million.

As at Dec 31, 2023, the trust’s weighted average lease expiry (WALE) stood at 11.5 years on a gross floor area (GFA) basis.

The trust’s gearing stood at 38.7% with an interest coverage ratio of 4.1 times. Some 87.2% of its debt has been pegged to fixed rates or hedged, while its debt maturity profile has no refinancing requirements until May 2026.

See also: ISEC Healthcare 1QFY2024 earnings dip by 6% y-o-y on higher admin costs

First REIT’s assets under management (AUM) stood at $1.14 billion as at end-December, of which 25.5% were in developed markets. The trust says it is on track to meet its target of a developed market portfolio of over 50% by FY2027.

Cash and cash equivalents as at end-December stood at $40.3 million.

“Our portfolio of 32 high-quality healthcare and healthcare-related properties continued to see positive underlying performance in FY2023. Despite a challenging economic environment, the trust remained resilient given our sustainable lease structures and the broadening of our tenant mix and geographical presence,” says Victor Tan, executive director and CEO of the manager.

“Our nursing homes in Japan and Singapore now comprise more than one quarter of the trust’s AUM in FY2023, and we will continue to work towards the target of having more than 50% of the trust’s AUM in developed markets by FY2027,” he adds. “The strong demand for quality healthcare in our key markets and ongoing diversification strategy will continue to bode well for all our unitholders in the long run.”

Units in First REIT closed unchanged at 26.5 cents on Feb 20.

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