Thursday, January 26, 2012

First REIT: 4Q 2011 results

DPU for First REIT 4Q is 1.93c. This is inclusive of a 0.32c of capital gain from the sale of its Adam road property of about 8.7M. The distributions will be paid on the 29th Feb (like many other reits)

Prices has been quite flat for the past 2 weeks or so. Investors are probably waiting for the results to be released before deciding on the next course of action to take. If this resistance of 0.77 is overcome, the next resistance will be around 0.79-0.80. The immediate support now is around 0.76

Other Notes:
1) NAV is $0.805 now. Last done is $0.77
2) gearing of 16% is very low compared to its other REIT counterparts
3) A 7.01c dpu for the entire FY translates to a yield of 9.1% based on current price. If we exclude the one time capital gain of 0.32c, the yield is 8.68%. This makes it one of the top five in terms of yield for REITs. Most of these high yield REITs are industrial REITs.
4) first REIT also outperformed STI since it listed in 2006.

Presentations slides: First REIT 2011 4Q results

I would think that the current price is still quite attractive for its yield. The low gearing makes it easier for the REIT to expand its portfolio if it needed to. The downside to this REIT is currency risk. With properties in Indonesia and Korea, there is a risk of lower distributions resulting from our growing strength in Singapore dollar. However, such currency fluctuations may also turn in your favour.

If the prices dip further, I will consider topping up on my stake in First REIT. If it continues to rise, I will be enjoying the paper gain on it as well. =)

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