PRIVACY POLICY

▼

Friday, July 26, 2013

First REIT: DPU increased 16.4% (Part 1).

First REIT declared a DPU of 0.86c. This is for the period of 22 May to 30 June 2013. This will be paid on 29 August 2013.

Including 0.99c paid for the period of 1 April to 21 May 2013, the total DPU for the quarter is 1.85c.

Gearing ratio: 33.4%

No debt will be due until 2016 once a fixed rate loan is finalised next month.

NAV/unit: 89.65c

Unit holders have to be prepared for more private placements as the REIT's managers have stated their intention to keep gearing at 30% even as they embark on future acquisitions and AEIs.

With unit price way above the NAV/unit, it is less expensive for the REIT to raise funds through issuing more equity now. As long as they are able to grow DPU in spite of a larger number of units in issue, I don't have a big issue (pardon the pun).

Like what the management has stated, despite a larger number of units in issue, DPU has grown 16.4% year on year. This means that without me having to invest more money, I am getting significantly more income from my investment in First REIT now.

Therefore, it would not be wrong to say that my investment in the REIT has been quietly growing a passive income stream for me without additional cost to me. 

 This makes me happy.

See presentation slides: here.
at

31 comments:

  1. CoryJuly 26, 2013 at 10:17 PM

    This put annualized yield above 6% at current price.

    ReplyDelete
  2. AK71July 26, 2013 at 10:37 PM

    Hi Cory,

    Almost 6.22%. :)

    ReplyDelete
  3. 钢铁侠July 26, 2013 at 10:38 PM

    First Reit did another great job. I am expecting 1.74cents/quarter, any amount beyond that is bonus to me...

    Cheers, Gregg

    ReplyDelete
  4. AK71July 26, 2013 at 10:41 PM

    Hi Gregg,

    Another investment we have in common, I see. :D

    ReplyDelete
  5. 钢铁侠July 26, 2013 at 10:53 PM

    HI Ak,

    I have been following up your blog, only First Reit and Marco are in common, lol..

    There is another one, Neratel but i have divested @ $0.570 few months ago. My heart broken when look at recently rally price... haha

    Cheers, Gregg

    ReplyDelete
  6. AK71July 26, 2013 at 11:08 PM

    Hi Gregg,

    I had to think hard whether to add aggressively to my long position in NeraTel at 60c to 63c last month and I am lucky that I did.

    Of course, share price could always come back down. So, you could have a chance to get back in at a lower price. :)

    ReplyDelete
  7. 钢铁侠July 27, 2013 at 7:36 AM

    HI AK,

    Side talk topic, previously First Reit has one IR officer, Lee Hao Wee, he is quite fast in responding the email but unfortunately he left in Mar 2013 after spending 6 good years in First Reit.

    Thanks for his hard work and hopefully he is one of AK follower to read this post. lol...

    Gregg

    ReplyDelete
  8. 钢铁侠July 27, 2013 at 7:42 AM

    HI AK,

    Referring to slide#23, http://infopub.sgx.com/FileOpen/2Q2013_PPT_Final.ashx?App=Announcement&FileID=249374

    Interesting to see First Reit also have AEI works for 3 property. I am sending in asking what is the budgeted capital expenditure, total added beds and any impact on the DPU. Hope to get their reply sooner than Marco response time. :)

    They did not update on the Lentor Residence Extension project. Suppose to be completed by Q2 2013.

    Gregg

    ReplyDelete
  9. AK71July 27, 2013 at 8:15 AM

    Hi Gregg,

    I was wondering about the expected effects of the proposed AEIs as well. I have not gone through the rest of their announcements and might have missed something.

    Anyway, it is always better to get the information right from the horse's mouth. Will wait for your updates here. Thanks. :)

    ReplyDelete
  10. INVS 2.0July 28, 2013 at 1:12 PM

    Didn't have any money to invest when the market crashed in 2008. Now I have but the market has gotten expensive. :/

    Hope for another crash so that I can get First for 0.73 again.

    ReplyDelete
  11. AK71July 28, 2013 at 1:28 PM

    Hi INVS 2.0,

    There are always value for money deals around. Even now, there are a few. ;p

    ReplyDelete
  12. Zoy ZoyJuly 28, 2013 at 3:20 PM

    Hi AK,

    May I ask what the significant of nav/unit?
    Is higher or lower implies certain aspects of first REIT ?

    ReplyDelete
  13. AK71July 28, 2013 at 3:28 PM

    Hi Zoy Zoy,

    NAV/unit refers to the per unit value of the REIT. Take the total value of all the REIT's assets minus all liabilities and divide this by the number of units outstanding.

    So, for example if a REIT had a NAV/unit of $1.00 and we bought it at $1.20, we would have paid a 20% premium but if we bought it at 80c, we would have bought at a discount instead.

    Generally speaking, for real estate, it is better to buy at a discount to valuation unless there is a good reason why that piece of real estate should be worth more.

    ReplyDelete
  14. KimJuly 28, 2013 at 3:30 PM

    Hi AK
    Few 'Value for money deal'???
    Can name the few?
    Thanks

    ReplyDelete
  15. AK71July 28, 2013 at 3:44 PM

    Hi Kim,

    I blogged about them before. LOL. ;)

    For example, I talked to myself about Marco Polo Marine a lot.

    ReplyDelete
  16. KimJuly 28, 2013 at 3:51 PM

    Hi AK
    yeah heard u talking abt neratel and marco polo....hmmm....no reits???

    ReplyDelete
  17. AK71July 28, 2013 at 4:13 PM

    Hi Kim,

    I talked about REITs too and only recently too. ;p

    ReplyDelete
  18. KimJuly 28, 2013 at 11:26 PM

    Hi AK

    Thanks. Got link to that reits post ?

    ReplyDelete
  19. AK71July 29, 2013 at 12:44 AM

    Hi Kim,

    Just read my recent blog posts on some REITs and you might also want to read the comments. I said some things here and there. ;)

    ReplyDelete
  20. KimJuly 29, 2013 at 6:42 AM

    Thank you AK, got it liao:)

    ReplyDelete
  21. AK71July 29, 2013 at 9:26 AM

    Hi Kim,

    Yikes! You found the room I was talking to myself? Sigh, my illness is more serious than I thought. -.-"

    ReplyDelete
  22. KimJuly 29, 2013 at 12:21 PM

    Hi AK
    Plse continue to talk to yourself...errhh...more loudly plse...so that we don't need to extend our ear too long to try to eavesdrop...kekeke..

    ReplyDelete
  23. AK71July 29, 2013 at 12:37 PM

    Hi Kim,

    You must be like James Bond 007. Use hi tech stuff to spy on people. Just subscribe to both "posts" and "comments". Then, you will never miss anything. ;)

    ReplyDelete
  24. ElaineAugust 20, 2013 at 12:08 PM

    Hi AK

    First Reit has been very beaten these last 2 days... but I can't find any updates on it.

    May I know if you haver any idea why the drop?

    cheers
    EK

    ReplyDelete
  25. AK71August 20, 2013 at 12:31 PM

    Hi Elaine,

    Generally, the mood has become rather pessimistic towards REITs. I don't know any specific reason for First REIT's price decline.

    ReplyDelete
  26. ZHANG ZhengAugust 20, 2013 at 1:38 PM

    Hi AK
    I believe the recent drop in the exchange rate from Indonesia Rupiah to USD causes the drop in Indonesia IDX composite index as well as the poor performance of REIT which derives their most incomes from Indonesia, such as FIRST REIT and LMIR.

    ReplyDelete
  27. AK71August 20, 2013 at 2:07 PM

    Hi Zhang Zheng,

    If I am not mistaken, their incomes are hedged. Their income in S$ terms should not be affected. :)

    I am sitting up now and looking at prices of S-REITs with more interest as the decline. ;)

    ReplyDelete
  28. ZHANG ZhengAugust 20, 2013 at 2:21 PM

    Hi AK
    Yes, I know that FIRST REIT has a hedge or something like fixed exchange rate between Rupiah and S$ (I am invested in FIRST REIT). Not sure about LMIR.

    Some market participants may not be aware. It is good that the drop in FIRST REIT presents some good opportunity. I saw its CEO, Dr. Tan, keeps buying its share.

    ReplyDelete
  29. AK71August 20, 2013 at 3:54 PM

    Hi Zhang Zheng,

    LMIR has a hedging strategy too. I am not too worried. :)

    The rough patch we are going through now is likely to get rougher and there will be opportunities to buy good quality assets cheaper. ;)

    ReplyDelete
  30. Lancelot ChuaDecember 1, 2014 at 3:22 PM

    Hi AK, is it worth buying First Reit now considering that its price ($1.245) is above its NAV ? Used to be vested but sold off for some cash flow, hence i am seeking your opinion on this.

    Cheers,

    Lance

    ReplyDelete
  31. AK71December 1, 2014 at 6:30 PM

    Hi Lancelot,

    Well, I cannot tell you whether it is worth buying or not. All I can say is that I am not tempted at all. ;p

    ReplyDelete