First REIT - OCBC Investment Research 2025-11-03: Interest Cost Savings Outpaced By SGD Appreciation

• First REIT (SGX:AW9U)’s 9M25 rental income and net property income (NPI) slipped 2% and 1.4% y-o-y to S$75.5m and S$73.3m, respectively – FX continues to be a recurring detractor, as underlying rental income from Indonesia and Japan was up 5.5% and flat at IDR567.3b and JPY1.1b, respectively, in local currency terms.
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Further interest cost savings expected post-refinancing of term loan coming due in May 2026.

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• All-in cost of debt, however, improved 20bps over the quarter to 4.6%, with 49.5% of debt on fixed rates or hedged. As interest rates decline, there may be further cost savings when First REIT refinances or extends its S$246.7m term loan due in May 2026. However, the impact of this on DPU will be heavily dependent on future FX movements and any changes to the REIT’s current hedging strategies, which are, in turn, dependent on the outcome of the strategic review, in our view.
• Separately, management updated that rentals outstanding from Metropolis Propertindo Utama (MPU) stood at S$6m as at 30 Sep 2025 (30 Jun 2025: S$7m), indicating some repayment progress during the quarter, even as the REIT continues to engage MPU on this matter.

We update our model to account for persistent FX headwinds, as well as the divestment of IAHCC.

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Above is an excerpt from a report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.

Read also OCBC's most recent report:
2026-02-06 First REIT - Pending Winds Of Change.

Price targets by 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 Dividend Payout Dates & Corporate Actions,
First REIT News