Broker: OCBC Group Research
Date of Report: 30 July 2026
Excerpt from OCBC Group Research report.
Report Summary
- Stock: First REIT (FIRT SP EQUITY)
- Action/Call: HOLD (as at 30 July 2026)
- Target Price (Fair Value): SGD 0.20 (revised down from SGD 0.23)
- Last Close: SGD 0.230
Key Highlights & Actionable Insights:
- First REIT’s 2Q26 distribution per unit (DPU) fell 4% quarter-on-quarter to 0.48 Singapore cents, missing expectations due to foreign exchange (FX) headwinds.
- The REIT’s aggregate leverage increased to 45.7%, but this is expected to be temporary as proceeds from the Indonesia asset divestment will be used to reduce debt.
- A strategic portfolio shift is underway, with the REIT divesting its Indonesia hospitals to focus on developed markets. This move may be dilutive for existing unitholders in the short term, but aims to lower risk and FX volatility over time.
- FY26 and FY27 DPU forecasts have been cut by 5.1% and 25.6% respectively, reflecting the anticipated income gap post-divestment. The revised fair value is SGD 0.20.
- The report reiterates a HOLD rating, citing the lack of identified replacement assets and the likely DPU decline until new acquisitions are made.
- Potential catalysts include successful asset recycling, higher than expected rental escalations from core tenants, and favourable lease renegotiations.
- Main risks are further depreciation of the Indonesian Rupiah or Japanese Yen against SGD, tenant default, and execution risks of the new strategy.
Above is an excerpt from a report by OCBC Group Research. Clients of OCBC Group Research can access the full research report from the broker’s website:
OCBC Group Research research website
