First REIT

[Nick]

Hi fellow unit-holders,

Gentle reminder - today is the last day to subscribe for the nil paid rights rights. Good luck is getting whatever excess rights you applied for.

http://info.sgx.com/webcoranncatth.nsf/V...00044421A/$file/First_REIT_Ad_English_version.pdf?openelement

Looking forward to the Q4 distribution though it will a lot lower as compared to the previous quarter due to the huge increase in the unit float.

(Vested)

[Blackjack]

Somehow, I find the advert feel of the reminder pretty comical, especially the durian box "Last Day to Subscribe!"

[Nick]

First REIT announced its latest property portfolio valuation.

http://info.sgx.com/webcoranncatth.nsf/V...70035B2AE/$file/Announcement_Annual_valuation_2010.pdf?openelement

All of its Indonesian properties reported smallish fair value gains while the 3 local nursing homes reported fair value losses. The local proposed Pacific Cancer Center situated on freehold land appreciated massively and will be due to be opened in middle of 2011. Overall, portfolio value increased by $14.6 million to $355.5 million.

As stated in the OIS, FR should book in $33.0 million fair value gain in their latest 2 acquisition since it was purchased below market valuation.

Forecast Gearing in 1Q 2011
Total Debt: $105 million (estimated to include AEI scheme)
Property Valuation: $594 million
Gearing: 17.7%

Please correct my figures if they are incorrect.

(Vested)

[Risk Adverse]

First REIT announced its latest property portfolio valuation.

http://info.sgx.com/webcoranncatth.nsf/V...70035B2AE/$file/Announcement_Annual_valuation_2010.pdf?openelement

All of its Indonesian properties reported smallish fair value gains while the 3 local nursing homes reported fair value losses. The local proposed Pacific Cancer Center situated on freehold land appreciated massively and will be due to be opened in middle of 2011. Overall, portfolio value increased by $14.6 million to $355.5 million.

As stated in the OIS, FR should book in $33.0 million fair value gain in their latest 2 acquisition since it was purchased below market valuation.

Forecast Gearing in 1Q 2011
Total Debt: $105 million (estimated to include AEI scheme)
Property Valuation: $594 million
Gearing: 17.7%

Please correct my figures if they are incorrect.

(Vested)

Is the depreciation of the three local nursing homes because they sit on leasehold land?
Would the DPU increase from 2H 2011 when the pacific cancer centre reopens for business?

[FFNow]

When will the rights be deposited into our CDP accounts?

[Nick]

Hi Taka666,

I think FR mentioned that we can trade our rights shares from 31 Dec onwards.

Cheers !

Hi Risk Adverse,

No reason was given for the devaluation of its 3 Singapore nursing homes. The short lease is a possibility since those 3 assets lease expires between 2032-2037. All 3 of them are valued below FR's purchase price. Asset enhancement schemes (like the proposed Lentor expansion) may increase its valuation and cash-flow.

The completion of the Cancer Center @ Adam Road in Mid 2011 will lead to an increase in rental income.

DPU Accretion and Yield
The new lease is expected to be yield accretive and will translates to an accretive Distribution per Unit (“DPU”) of 0.096 cent or 1.26% increase based on First REIT‟s DPU of 7.62 cents for financial year 2008

(http://firstreit.listedcompany.com/newsr...B63D.1.pdf )

After taking into account the recent rights issue, the completed asset center should yield an additional 0.042 SG cent to the dividend. So the increase in DPU isn't very significant.

Cheers !

[Risk Adverse]

Thanks a lot Nick. Any increase in DPU is welcome even if it only an increase of 0.096 cents.

[Nick]

First REIT completes acquisition of two Jakarta hospitals

- Assets under management almost doubled to S$612.8 million; aims to achieve a portfolio size of S$1 billion in two to three years
- Distributable income is expected to increase by 89% to S$40.3 million in projection year 2011

http://info.sgx.com/webcoranncatth.nsf/V...A002B96D8/$file/First_REIT_Completion_PR_FINAL.pdf?openelement [Press Release]

Q4 Dividends should decline to around 0.85 SG cents. Quarterly DPU in 2011 should be around 1.6 SG cents. Unit-holders can look forward to small DPU increment once the Pacific Cancer Centre is operational and the proposed Lentor Residence extension is completed.

There is still ample debt room available for First REIT to expand. Judging by its press release, I think it is likely that it will continue to acquire Indonesian assets from its sponsor.

[Musicwhiz]

Jan 1, 2011
First Reit doubles assets to $612.8m

FRESH from its recent rights issue, First Reit has acquired two new health-care properties in Indonesia, its manager Bowsprit Capital Corporation said in an announcement to the Singapore Exchange (SGX) yesterday.

The health-care real estate investment trust (Reit) completed the acquisition of Mochtar Riady Comprehensive Cancer Centre on Thursday and that of Siloam Hospitals Lippo Cikarang yesterday, Bowsprit said.

With these two purchases, First Reit has almost doubled its assets under management to $612.8 million as of yesterday.

It has also increased the total gross floor area of its portfolio assets by nearly 60 per cent, from 900,274 sq ft previously to 1.43 million sq ft now. The total number of hospital beds in First Reit's Indonesia portfolio will also rise 44 per cent from 537 to 772, Bowsprit said.

'The two acquisitions were made possible because of our unitholders' overwhelming support for our recent rights issue,' said Mr Albert Saychuan Cheok, chairman of Bowsprit.

First Reit raised $167.3 million in net proceeds from its rights issue, of which $121.7 million was used to partly finance the acquisition of the Mochtar Riady Comprehensive Cancer Centre, Bowsprit said on Thursday. The rest of the acquisition was financed through a loan.

The Reit aims to grow its portfolio to $1 billion in the next two to three years, said Dr Ronnie Tan, Bowsprit's chief executive officer. 'With the completion of the acquisitions and rights issue, we now have a stronger balance sheet,' he added.

First Reit's gearing level is projected to be about 17 per cent for this year, 'significantly lower than the regulatory limit of 35 per cent'. This will give the Reit room for future acquisitions, Dr Tan said.

As a result of the larger portfolio, Bowsprit expects First Reit's annual gross rental income to rise about 80 per cent, from the $30.3 million projected for last year to $54.5 million this year.

On the same basis, distributable income is also expected to increase by 89 per cent, from $21.3 million to $40.3 million.

[Nick]

OCBC Research has initiated coverage on First REIT with a TP of $0.84. It issued a very comprehensive 25 page research report here - http://www.remisiers.org/cms_images/Firs...07-OIR.pdf

Besides OCBC, both SIAS Research and CIMB are covering First REIT and prospective investors can view their quarterly research reports and site/management visit reviews here - http://firstreit.listedcompany.com/resea...ports.html

At the moment, First REIT is trading at a small discount to its book value with an attractive yield of 8.53%. Its gearing stands at 17% which is significantly below its regulatory limit. I do expect some debt funded acquisitions to take place this year...

(Vested)