First REIT's NPI up 3.2% to $27.5m in Q3

Higher contributions from Siloam Hospitals Labuan Bajo boosted the REIT's profits.

First REIT's (FREIT) net property income went up by 3.2% YoY to $27.5m in Q3.

According to OCBC Investment Research, contributions from Siloam Hospitals Labuan Bajo, coupled with higher rental income from existing properties in Indonesia, Singapore and South Korea, collectively helped to boost net profits.

Distribution per unit (DPU) also went up 0.9% YoY to 2.14 cents, whilst gross revenue rose by 3.3% YoY to $27.8m.

FREIT completed the acquisition of Siloam Hospitals Buton and Lippo Plaza Buton for $28.5m on 10 October 2017.

"We believe this transaction will be DPU-accretive from 4Q17 onwards," said OCBC analyst Joseph Ng.

Not only that, FREIT is still seeking a joint acquisition of an integrated development in Yogyakarta.

"While these should wrap up transactional activity in 2017 nicely, we believe that more could be in store for 2018," Ng added.

Here's more from OCBC Investment Research:

Based on our estimates, FREIT’s gearing level of 32.6% as at 30 September 2017 should translate into ~S$172m of debt headroom before reaching 40.0%, which should comfortably support potential acquisitions from its sponsor’s pipeline of ~40 hospitals.

Positive base rental revisions should also be achievable, with the latest reported inflation for Jan-Sep 2017 coming in at a 0.6% YoY increase. The median Bloomberg consensus for 2017’s CPI currently stands at 0.8% YoY.

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