First REIT - Lower DPU with weakness in Indonesian Rupiah

Lower distribution

First REIT reported distribution per unit (DPU) of S$0.58/unit for 1Q 2025, a decline of 3.3% year-on-year compared to 1Q 2024. 

Net property income (NPI) declined by 2.2% year-on-year to $24.6m in 1Q 2025, driven by depreciation of Indonesian Rupiah and Japanese Yen against the Singapore Dollar, offset by higher rental income from Indonesian and Singapore properties. 

Rental income from Singapore properties increased 2.0% year-on-year compared to year ago, while Indonesian properties rose by 5.5% year-on-year over the same period. 

Rental income from Japan properties was stable.

Rental outstanding from MPU increases

As of 31 March 2025, the rental outstanding from PT MPU amounted to approximately S$5.8m, increasing from S$4.6 million as of 31 December 2024. 

The rental outstanding comprises of approximately S$2.5m and S$3.3m for the mall and hospital respectively. 

As at 31 March 2025, the security deposit from MPU amounted to S$4.1m, below the total arrears from the tenant.

Strategic review ongoing

First REIT has appointed Citigroup Global Markets Singapore to conduct a strategic review which will consider all options relating to First REIT’s operations such as joint ventures, asset acquisitions and/or divestments to deliver sustainable long term value for unitholders. 

As for the Indonesian portfolio, First REIT has also appointed a marketing agent to conduct price discovery process, with an outreach to 60 parties to solicit interest for the portfolio.

Higher leverage but lower interest rate

First REIT’s gearing ratio rose to 40.7% as at 31 March 2025 from 39.6% as at 31 December 2024. 

First REIT’s all in interest rate declined to 4.7% as at 31 March 2025, from 5.0% as at 31 December 2024. 

There is no refinancing requirement until May 2026, where a tranche of S$243.7 term loan will mature. 

First REIT is already looking to extend the loan by another 1 to 2 years.

Maintain NEUTRAL

While the ongoing strategic review may provide potential upside surprise, First REIT may face near term headwinds from Rupiah weakness and risks from MPU arrears. 

First REIT is currently trading at 0.95x P/NAV, and offers a potential FY25E dividend yield of 8.9%.

Check out Beansprout guide to the best stock trading platforms in Singapore with the latest promotions to invest in First REIT. 

Related article: First REIT - Near-term headwinds while awaiting strategic review outcome

Related links:

• First REIT share price history and share price target
• First REIT history and dividend forecasts

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