First REIT’s (FREIT) results were within our expectations. 4Q17 gross revenue grew 5.8% YoY to S$28.6m while DPU grew 0.9% YoY to 2.15 S-cents. On a full-year basis, gross revenue was up 3.7% to S$111.0m, forming 100.2% of our forecast. FY17 DPU registered a 1.2% YoY growth to 8.57 S-cents, comprising 99.8% of our FY17 forecast.

Growth in 4Q17 was on the back of a full quarter’s contribution from Siloam Hospitals Labuan Bajo (acquired in Dec 2016), and initial contributions from Siloam Hospitals Buton and Lippo Plaza Buton and Siloam Hospitals Yogyakarta, which were acquired in Oct 17 and Dec 17, respectively. Gearing remains healthy at 33.6%, as at 31 Dec 2017.

FREIT has also secured up to S$400m in syndicated secured financing facilities, which will partially go towards refinancing outstanding bank loans and fund future acquisitions. Further to an analyst briefing today, we maintain our BUY rating, but put our fair value of S$1.44 under review.

Source: OCBC Research - 18 Jan 2018