Healthcare Reit First Reit Posts Lower Distribution Per Unit for 2024
First Reit, a healthcare real estate investment trust (Reit), posted a distribution per unit (DPU) of S$0.0116 for the second half of its 2024 fiscal year – a 6.5 per cent decrease from S$0.0124 in the same period in the previous year.
Decline in DPU
The DPU for the H2 ended Dec 31, 2024, comprises the DPU of both the third and fourth quarters of the fiscal year, which were both at S$0.0058, said the manager via a bourse filing on Tuesday (Feb 11).
The Q3 DPU was paid out on Dec 20 last year, while unitholders will receive the remaining sum on Mar 28 this year.
Full-Year DPU
Including the DPU of S$0.012 for the first half of the financial year, this brings First Reit’s 2024 full-year DPU to S$0.0236, a 4.8 per cent decrease from S$0.0248 the previous year.
Reasons for Decline
The lower DPU was a result of a lower distributable income of S$24.3 million for H2 FY2024 – a 6.4 per cent decrease from the corresponding period a year before. For the full year, distributable income declined 4.1 per cent to S$49.3 million.
This was mainly due to lower rental income resulting from the depreciation of the Indonesian rupiah and Japanese yen against the Singapore dollar, though this was partly offset by higher rental income from Singapore properties.
Net Property Income and Asset Value
Net property income fell 9 per cent to S$48.2 million for H2, compared with S$52.9 million in the same period in the previous year. For the full year, it decreased by 6.5 per cent to S$98.5 million from S$105.3 million.
As at Dec 31, 2024, the Reit’s portfolio was valued at S$1.12 billion, which is a 1.9 per cent decline from FY2023 due to currency depreciation, though this was partly offset by an increase in the valuation of its Indonesia and Japan properties in local currency terms. Its portfolio has a weighted average lease expiry of 10.6 years.
Net asset value per unit stood at S$0.286 as at Dec 31, 2024, 5.2 per cent lower than S$0.3018 in the previous year.
Outlook
As for its outlook, the manager said that the timing and pace of the United States Federal Reserve’s interest rate cuts would be key.
Citing expectations of the global economy expanding by 3.2 per cent in 2025, and marginally slowing to 3.1 per cent over the next five years, the manager added that the figures represent one of the weakest medium-term outlooks in decades, with indications that global forecasts are being trimmed to reflect the impact of the new administration’s policies in the US.
Conclusion
Despite the decline in DPU, First Reit’s healthcare-related portfolio continued to demonstrate healthy underlying performance and operational strengths for the full year. Its sustainable lease structures and 100 per cent committed occupancy rates were the key drivers during economic uncertainties in 2024.
FAQs
Q: What was First Reit’s DPU for the second half of its 2024 fiscal year?
A: S$0.0116, a 6.5 per cent decrease from S$0.0124 in the same period in the previous year.
Q: What was the main reason for the decline in DPU?
A: Lower rental income resulting from the depreciation of the Indonesian rupiah and Japanese yen against the Singapore dollar, partly offset by higher rental income from Singapore properties.
Q: What was First Reit’s full-year DPU for 2024?
A: S$0.0236, a 4.8 per cent decrease from S$0.0248 the previous year.
Q: What is the weighted average lease expiry of First Reit’s portfolio?
A: 10.6 years.
