First REIT - OCBC Investment 2023-04-25: Mixed Results But Fundamentals Still In Play

First REIT - Mixed Results But Fundamentals Still In Play

First REIT (SGX:AW9U) | SGinvestors.ioFirst REIT (SGX:AW9U)
  • First REIT’s 1Q23 rental income grew by 4.9% y-o-y to S$26.8m, slightly missing our expectations due to foreign exchange fluctuations.
  • Higher rental income from built-in rent increment across its properties in Singapore and Indonesia more than offset the loss of rental income following the divestment of Siloam Hospitals Surabaya in Sep 2022.

First full quarter of rental contribution from Japan nursing homes

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  • Since most of its Japan properties are leased on a single net basis, its net property income (NPI) margin was weighed down by higher inflation, coming in at 96.3% versus 98.8% in FY22. Correspondingly, NPI increased by a narrower 2.7% y-o-y to S$25.8m.

Higher aggregate leverage and cost of borrowing

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  • First REIT expects its cost of debt to stabilize at these levels, given that majority of its floating rate loans comprise of JPY debt, and that it intends to further increase its hedging ratio further going forward.

Continue to monitor potential tenant default risk

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Above is the excerpt from report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full report in PDF @

Ada Lim OCBC Investment Research | 2023-04-25

Read also OCBC's most recent report:
2024-04-25 First REIT - FX Headwinds Continue To Bite.

Previous report by OCBC:
2024-02-21 First REIT - Stable Condition.

Price targets by 2 other brokers at First REIT Target Prices.

Listing of research reports at First REIT Analyst Reports.

Relevant links:
First REIT Share Price History,
First REIT Announcements,
First REIT Dividends & Corporate Actions,
First REIT News Articles


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