- We like healthcare S-REITs during times of volatility for their defensive nature and high level of cash flow visibility, but caution that FX is likely to remain a headwind for First REIT (SGX:AW9U).
We note that, in recent years, First REIT’s DPU has declined largely due to FX headwinds.
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- In local currency terms, rental income from the Japanese nursing homes were flat while that from the Indonesian assets had grown 4.7%. The IDR has come under significant pressure year-to-date, and we think there are risks of further IDR weakness, especially if a global growth slowdown triggered by President Trump’s worse-than-expected tariffs places pressure on commodity prices.
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Progress relating to 2.0 Growth Strategy could still present a near-term catalyst.
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