fy 2011 financial resultsfirstreit.listedcompany.com/newsroom/20120126_180547_aw9...2012/01/26 ·...

26 January 2012

FY 2011 Financial Results

Disclaimer

This presentation has been prepared by Bowsprit Capital Corporation Limited, in its capacity as the manager of First RealEstate Investment Trust (“First REIT” and as manager of First REIT, the “Manager”).

The value of units in First REIT (“Units”) and the income from them may fall as well as rise. Units are not obligations of,deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks,including the possible loss of the principal amount invested.

This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties based onthe Manager’s current view of future events. Actual future performance, outcomes and results may differ materiallyfrom those expressed in forward-looking statements as a result of risks, uncertainties and assumptions – representativeexamples include, without limitation, general economic and industry conditions, interest rate trends, cost of capital,capital availability, shifts in expected levels of property rental income, change in operating expenses, property expensesand government and public policy changes and continued availability of financing in the amounts and the termsnecessary to support future business.

The past performance of First REIT is not necessarily indicative of the future performance of First REIT.

1 Financial highlights

2 DPU & price comparison

3 Capital management

4 In review

5 Portfolio highlights

6 Prospects

3

2011 financial highlights

Gross revenue increase mainly due to contributions from 3 new property acquisitions in Indonesia (December 2010) and Korea (August 2011)

o Mochtar Riady Comprehensive Cancer Centre o Siloam Hospitals Lippo Cikarango Sarang Hospital

Net asset value per unit stands at 80.50¢ as at 31 December 2011

+ 82.0%: S$13.9 m + 82.2%: S$13.8 m + 122.9%: S$12.1 m

4

4Q

Gross revenue Net property income Distributable income

+ 78.4%: S$54.0 m + 78.9%: S$53.4 m + 105.8%: S$43.9 m FY

Financial overview

S$’000 4Q 2011

4Q 2010

Change FY2011

FY2010

Change

Gross Revenue 13,925 7,649 + 82.0% 54,006 30,274 + 78.4%

Net Property Income 13,773 7,559 + 82.2% 53,436 29,875 + 78.9%

Distributable Amount 12,1151 5,434 + 122.9% 43,9341 21,346 + 105.8%

Distribution Per Unit (cts)• For the period• Adjusted

1.931

1.931

0.870.87

+ 121.8%+ 121.8%

7.011

7.011

6.633.423

NC2

+ 105.0%

Annualised Distribution Per Unit (cts) 7.011 6.634 NC2 7.011 6.634 NC2

NC = Not comparable1) 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. The

balance of the gain will be distributed to unitholders at the discretion of the Manager of First REIT in future periods.2) YTD 31 December 2011 vs YTD 31 December 2010 are not comparable due to the effect of the rights issue and acquisitions made in

December 2010. (see also footnote 3)3) Restated to take into account the effect of the rights issue in December 2010.4) Actual paid for FY 2010 and the distribution for 4Q 2010 was based on enlarged units base as a result of rights issue in December 2010.

5

Quarterly performance

Steady rental structure

Yearly rental increment for Indonesia properties; base (2x percentage increase of Singapore CPI, capped at 2%) plus variable components (function of turnover growth). Singapore and South Korea properties comprise fixed base rental and annual increment of 2.0%.

Long term leases

Rental from Indonesia and Singapore properties denominated in Singapore dollars, and rental from South Korea property denominated in US dollars.

Net Property IncomeGross Revenue

6

54,006

30,274

53,436

29,875

S$’000

Rental income: breakdown by geography

Higher revenue to be generated from Indonesia

Enjoyed variable rental growth component of 1.25% of total gross revenue of the four existing Indonesian assets in FY 2011, in addition to the annual escalation based on 2 times Singapore CPI (capped at 2%); acquisition of MRCCC and SHLC properties to further boost revenue in FY 2011

Added dimension from new geographical region

Sarang Hospital enjoys high occupancy rate; known for its rehabilitative treatment and nursing healthcare services

S$’000

7

1Q 12,444 736 -

2Q 12,468 755 -

3Q 12,606 768 304

4Q 12,655 769 501

1Q 6,729 722

2Q 6,803 740

3Q 6,878 753

4Q 6,895 754

90.2%

9.8%

92.9%

5.6% 1.5%




4 In review


6 Prospects

1.96¢

Excluding Rights Issue units

*Actual DPU for 4Q 2010

9

Quarterly DPU breakdown

Consistent DPU

2009 2010 2011

DPU for 3Q 2011 and 4Q 2011 includes distribution coming out of a portion of the total gains on divestment of the Adam Road property which was divested in 1Q 2011

Actual paid for FY 2010 and the distribution per unit in 4Q 2010 was based on the enlarged unit base as a result of the rights issue in December 2010

The distribution for 4Q 2011 includes distribution coming out of a portion of the total gains on divestment of the Adam Road property in 1Q 2011, which is estimated to be around S$8.7 million

The balance of the gain will be distributed to unitholders at the discretion of the Manager of First REIT in the coming quarters

1 Oct 2011 – 31 Dec 2011

Distribution details

Distribution Per Unit 1.93¢

- Taxable 0.08¢

- Tax-Exempt 1.19¢

- Capital 0.32¢

- Other gain 0.34¢

Book Closure Date 3 February 2012

Distribution Payment Date 29 February 2012

First REIT has maintained a payout policy of 100% of distributable income since listing in Dec 2006

10

The ex-dividend date will be on 1 February 2012

As at 25 Jan 2012

Since listing in December 2006

Adjusted for Rights Units

11

First REIT share performance

FTSE ST Real Estate Investment Trusts Index

STI Index

First REIT

First REIT vs STI Index vs FTSE ST REIT Index

12

As at 25 Jan 2012




4 In review


6 Prospects

Assets

Liabilities

S$’000As at 31 Dec 2011 As at 31 Dec 2010

(Restated)

Non-current 618,453 612,800

Current 42,163 41,771

Total 660,616 654,571

Non-current 79,586 87,426

Current 75,731 81,273

Total 155,317 168,699

Unitholders’ Funds 505,299 485,872

NAV/unit 80.50¢ 78.08¢

14

Healthy balance sheet

Investment properties increased from S$612.8 million to S$618.0 million due to increase in fair value of investment properties, the acquisition of Sarang Hospital and the divestment of the Adam Road property

Unitholders’ funds increased due to the increase in the fair value of investment properties as a result of the annual valuation dated 28 December 2011

As at 31 Dec 2011 As at 31 Dec 2010

Total Debt* S$98.7 million S$57.7 million

Interest Cover 12.3 times 11.6 times

Debt-to-Property 16.0% 9.4%

* before transaction costs

15

Borrowings are secured by property assets (except Sarang Hospital)

Low gearing

Total Debt increased due to the drawdown of the OCBC Term Loan facilities to part finance the acquisition of MRCCC and the acquisition of Sarang Hospital. The amount was partly offset by the repayment from the net sale proceeds from the divestment of the Adam Road property

Even after the drawdown of the loan, First REIT’s gearing is still much lower than the regulatory limit of 35%




4 In review


6 Prospects

Completion of acquisition in South Korea

South Korea’s Sarang Hospital: completed in August 2011

Purchase price : US$13.0 million

Land tenure : Freehold

Land area : 2,142 sqm

Gross Floor Area : 4,982 sqm

Lease terms : 10 years with option to renew for 10 years from date of completion

Rental Escalation : 2.0 %

The largest rehabilitation treatment and nursing services facility in Yeosu City – host of the 2012 World Expo

17

Extension detailsA 5-storey building to, and adjoining, the existing building

Purpose Nursing home

Floor area Approximately 994 sqm

Estimated cost S$5.0 million

Expected completion 2H 2012

18

In line with our investment strategy to improve the returns and optimise the plot ratio of existing properties in the REIT’s portfolio, we are developing an extension to the Lentor Residence

Details of extension

Asset enhancements at Lentor Residence




4 In review


6 Prospects

First REIT now has ten properties across Indonesia, Singapore and South Korea

3 nursing homes with 672 beds 10-year leases with option to renew for 10 years Nearest date of renewal: Apr 2017

Enlarged portfolio

20

Indonesia

5 hospital properties with 775 beds 1 hotel and country club with 197 saleable rooms 15-year leases with option to renew for 15 years Nearest date of renewal: Dec 2021

Singapore

South Korea

1 hospital with 217 beds 10-year lease with option to renew for 10 years Nearest date of renewal: Aug 2021

Portfolio breakdown

Valuation since IPO (S$m)

Property 2006 2007 2008 2009 2010 *2011 % (2011)

Indonesia

Siloam Hospitals Lippo Village 132.5 139.0 138.5 146.8 147.3 153.8 24.9%

Siloam Hospitals Kebon Jeruk 71.2 75.1 74.1 81.2 82.0 85.9 13.9%

Siloam Hospitals Surabaya 23.6 25.8 26.2 27.4 29.7 30.9 5.0%

Imperial Aryaduta Hotel & Country Club 29.8 31.8 32.2 30.9 34.1 35.5 5.7%

Mochtar Riady Comprehensive Cancer Centre - - - - 216.0 217.5 35.2%

Siloam Hospitals Lippo Cikarang - - - - 41.3 41.3 6.7%

Subtotal 257.1 271.7 271.0 286.3 550.4 564.9 91.4%

Singapore

Pacific Healthcare Nursing Home @ Bukit Merah - 12.0 12.0 11.4 11.1 11.0 1.8%

Pacific Healthcare Nursing Home II @ Bukit Panjang - 11.4 11.4 11.1 11.0 11.0 1.8%

The Lentor Residence - 13.0 13.0 12.5 12.1 14.0 2.2%

Adam Road property1 - 17.5 17.5 19.6 28.2 - -

Subtotal - 53.9 53.9 54.6 62.4 36.0 5.8%

South Korea

Sarang Hospital2 - - - - - 17.1 2.8%

Grand Total 257.1 325.6 324.9 340.9 612.8 618.0 100%

* As at 28 December 20111 The Adam Road property was divested on 25 March 20112 Based on the valuation of US$13.2 million and exchange rate of US$1 = S$0.77

21

22

Indonesia

Mochtar Riady Comprehensive Cancer Centre

Siloam Hospitals Lippo Cikarang

Siloam Hospitals Lippo Village

Siloam HospitalsKebon Jeruk

Siloam HospitalsSurabaya

Imperial AryadutaHotel & Country

Club

Type Hospital Hospital Hospital Hospital HospitalHotel & Country

Club

Land Area 4,145 sqm 9,900 sqm 17,442 sqm 11,420 sqm 6,862 sqm 54,410 sqm

Gross Floor Area 37,933 sqm 11,125 sqm 27,284 sqm 18,316 sqm 9,227 sqm 17,427 sqm

Purchase Price S$170.5 million S$35.0 million S$94.3 million S$50.6 million S$16.8 million S$21.2 million

Appraised Value1 S$217.5 million S$41.3 million S$153.8 million S$85.9 million S$30.9 million S$35.5 million

Annual Rental S$18,739,000 S$3,778,000 S$13,388,000 S$7,587,000 S$3,001,000 S$3,680,000

No. of Beds / Saleable rooms

165 112 160 178 160 197

No. of Staff

32 full time & part time doctors and

54 nurses & medical staff

75 full time & part time doctors, 115

nurses and medical staff







--

Year of Building Completion

2010 2002 1995 1991 1977 1994

Centre of Excellence

Oncology Digestive Unit

Urology, Internal Medicine, Trauma

Neuro-science centre, Heart

centre

Urology centre, Orthopaedics

Fertility centre, Stroke centre --

Lease Terms

15 years with option to renewfor 15 years wef

30 Dec 2010

15 years with option to renew for

15 years wef 31 Dec 2010




15 years wef11 Dec 2006




15 years wef11 Dec 2006

1: MRCCC was appraised by KJPP Rengganis, Hamid & Rekan in strategic alliance with CB Richard Ellis (Pte) Ltd as at 28 December 2011. The other five Indonesian properties were each appraised by KJPP Willson & Rekan in association with Knight Frank as at 28 December 2011.

23

Singapore

Pacific Healthcare Nursing Home @ Bukit Merah

Pacific Healthcare Nursing Home II @ Bukit Panjang

The Lentor Residence

Type Nursing Home Nursing Home Nursing Home

Land Area 1,984 sqm 2,000 sqm 2,486 sqm

Gross Floor Area (“GFA”)

3,593 sqm 3,563 sqm 2,983 sqm

Purchase Price S$11.8 million S$11.5 million S$12.8 million

Appraised Value1 S$11.0 million S$11.0 million S$14.0 million

Annual Rental S$991,000 S$966,000 S$1,071,000


259 265 148


2004 2006 1999

Title30 years leasehold from

22 Apr 200230 years leasehold from

14 May 200399 years leasehold from

20 Aug 1938

Lease Terms10 years with option to renew for 10 years wef

11 Apr 2007

10 years with option to renew for 10 years wef

11 Apr 2007

10 years with option to renew for 10 years wef

8 Jun 2007

1: Appraised by Colliers International Consultancy & Valuation (Singapore) Pte Ltd as at 28 December 2011.

Sarang HospitalYeosu City

Type Hospital

Land Area 2,142 sqm

Gross Floor Area (“GFA”)

4,982 sqm

Purchase Price US$13.0 million

Appraised Value1 US$13.2 million

Annual Rental US$637,000


217


2010

Title Freehold

Lease Terms 10 years with option to renew for 10 years wef 5 Aug 2011

24

South Korea

1: Appraised by Cushman & Wakefield (Korea) Ltd as at 28 December 2011.




4 In review


6 Prospects

Dominates Indonesia’s Retail Malls and Hospitals

Currently has 7 hospitals with 1,227 beds under the Siloam Hospitals network

Nationally and internationally accredited

26

Lippo Karawaci – the largest listed property company in Indonesia

LK’s growth plans: 25 hospitals in 5 years

East Kalimantan• June 2011• 104 beds

• 24 outpatient suites• 3 operating theatres

Siloam HospitalsBalikpapan

Siloam HospitalsJambi

Siloam HospitalsMakassar

East Sumatra• February 2011

• 59 beds• 40 outpatient suites • 3 operating theatres

South Sulawesi• 4Q 2011• 200 beds

LK’s 3 new hospitals

Strong sponsor pipeline in Indonesia

Intends to quadruple Siloam hospital division to 25 hospitals in five years

Transformational hospital group scale-up to USD3.5 billion in 5 years

First REIT has a Right of First Refusal to acquirenew healthcare properties from Lippo Karawaci,and has sufficient headroom for futureacquisitions and funding if the need arises

27

Singapore: Nursing Home Development Programme

Possible acquisitions in other markets

Will continue to hunt for quality and yield-accretive healthcare-related assets in Asia

Target to raise asset base to S$1 billion in the next two to three years

Singapore & other markets

2011: A slew of governmental measures aimed at making healthcare more affordable to Singaporeans; more subsidies to cover social care for the elderly and health screening for the elderly

December 2010: The Singapore government launched the S$120 million “Nursing Home Development Programme” to boost healthcare in the home, nursing homes and community hospitals

6 new and upgraded nursing homes are expected to be completed over the next 3 years

Demand for such facilities and the number of nursing home beds in Singapore are projected to increase from 9,300 to 14,000 by 2020

Thank You

Q&As

fy 2011 financial resultsfirstreit.listedcompany.com/newsroom/20120126_180547_aw9...2012/01/26 ·...

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