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DPU for 4Q 2011 is 1.93c which is another bumper distribution! The REIT will go XD on 1 February and the income distribution is payable on 29 February.
This includes distribution coming out of a portion of the total gains on divestment of the Adam Road property of about S$8.7 million.
Without such a return of capital, the DPU for 4Q 2011 is 1.61c. Annualised DPU is, therefore, estimated to be 6.44c. To calculate a more realistic distribution yield, we have to use this number. At the unit price of 77c, we get a distribution yield of 8.36%.
NAV/unit: 80.5c
Gearing: 16%
Interest cover ratio: 12.3x
Technically, volume has been rising but price has plateaued at 77c which seems like a difficult resistance to overcome.
How would Mr. Market react to the REIT's results? Could we see price action breaking resistance at 77c and going higher? If resistance should be overcome, there is a chance of a retest of 80c which I see as the upper end of a trading range.
See presentation slides: here.
Related post:
First REIT: Bumper distribution 3Q 2011.
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2 comments:
First REIT is doing well.
Singapore's population is aging. We need more nursing homes.
Lentor Residence is building a 5-storey extension for the increasing demand.
Just a question. Do you think the DPU can be maintained at around 1.93 cents level next year?
Hi DW,
In the absence of fresh acquisitions fully funded by debt or significant AEI, I feel that a more realistic quarterly DPU is in the region of 1.6c to 1.65c.
Without considering the return of capital from the sale of its Adam Road property, to have a cosistent 1.93c quarterly DPU would require approximately 20% increase in distributable income. Keeping the status quo, this would be a tall order. :)
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