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 Dec 2023

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.
  

• Overall portfolio’s WALE is high

What I Do Not Like About First REIT:

• High tenancy concentration risk of which the main tenant had shown signs of weakness (nearly defaulted) in 2020. As such, investors will have to pay special attention to the health of the tenant to avoid a repeat.
  

• High foreign exchange rate exposure to the Indonesia Rupee which, historically, has been performing very poorly against the Singapore Dollar.