FIRST Real Estate Investment Trust (First Reit) posted a 6.5 per cent drop in distribution per unit (DPU) for the third quarter ended Sep 30, 2024, to S$0.0058, from S$0.0062 in the corresponding period in the previous year.
This brought the DPU for the nine months year-to-date to S$0.0178, down 4.3 per cent year on year from S$0.0186, the Reit’s manager said in a business update on Wednesday (Oct 30).
First Reit’s distributable amount declined by 3.4 per cent to S$37 million in the nine-month period, from S$38.4 million in the same period a year ago. This came as rental and other income fell 5.3 per cent on year to S$77 million for the recent nine-month period. Net property and other income fell 6 per cent to S$74.4 million over the same period.
These were affected by the depreciation of the Japanese yen and Indonesian rupiah against the Singapore dollar, but this was partly offset by higher rental income in local currency terms from the properties in Indonesia and Singapore, the manager said.
An enlarged unit base, resulting from the issuance of units for the payment of the management fee to the manager, also contributed to the drop in DPU.
Excluding FRS 116 adjustments, rental and other income fell 1.8 per cent on the year to S$68.4 million in 9M FY2024 from S$69.6 million. Net property and other income, meanwhile, was down 2.5 per cent to S$65.7 million from S$67.4 million in the same period last year.
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The distribution for Q3 will be paid on Dec 20, after books closure on Nov 13.
First Reit’s gearing stood at 39.3 per cent as at Sep 30, 2024, up from 38.7 per cent as at Dec 31, 2023. About 86 per cent of its debt is on fixed rates or hedged. It has no refinancing requirements until May 2026. Its manager also noted that rentals outstanding from Metropolis Propertindo Utama amounted to approximately S$7.9 million, as at Sep 30, 2024. It is actively engaging on repayments.
Looking forward, it noted signs of stabilisation in the global economy, despite ongoing geopolitical tensions and market uncertainty. On inflation, it said it is closely monitoring and progressively hedging net cashflow from Indonesia and Japan. It also highlighted the ageing populations in Japan, Singapore and Malaysia, adding that it is “strategically placed to leverage these demographic shifts and heightened demand for healthcare services”.
The Reit is targeting for developed markets to comprise more than 50 per cent of its portfolio by FY2027, to deliver sustainable growth. This includes divesting non-core assets or mature properties and recycling the capital for strategic acquisition opportunities in developed markets, its manager said.
Units of First Reit closed flat at S$0.27 on Wednesday, before the announcement.
