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Writer's pictureDaniel Lee
May 13 min read

Should You Invest In First REIT [Fundamental Analysis]

In this article, we'll be conducting a fundamental analysis of First REIT and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having a high degree of capital preservation ability.


Information Is Accurate Up To April 24


Business Description

First REIT is a Healthcare REIT that was listed in 2006 and owns 32 healthcare properties with the majority of its revenue being derived in Indonesia.


What I Like About First REIT:

  • Before the 2020 tenancy event, the performance of the REIT and management had been notable in terms of their consistency in delivering stable distribution per unit.

  • Clear strategic direction: To move into the developed markets with a target allocation of 50% of AUM by 2027 and also liquidate non-core or mature assets (Hospitality & Retail) for capital recycling to focus on healthcare properties.

  • Overall portfolio’s WALE is high and the master lease agreement often comes with built-in rent increments (at least 4.5% in Indonesia)



What I Do Not Like About First REIT:

  • High tenancy concentration risk of which the main tenant had shown signs of weakness (n