Fancy
a REIT that allows you to earn rental income from Indonesian hospitals?
A fellow friend of mine
who is an astute investor, shared with me recently on this REIT that is listed
in Singapore stock exchange, but owns healthcare assets across Indonesia, Singapore
and South Korea. It has 18 hospital assets with 11 of them located in
Indonesia.
The aim of this REIT is
to acquire profitable hospitals across Asia and it is committed to distribute
100% of its taxable income. Hence, primary reason buying into REIT should
always be earning the stable and rising stream of passive income, any capital
gains are BONUS.
This healthcare REIT is
ultimately owned by Lippo Karawaci, a well-established property player in
Indonesia that is listed in Indonesia stock exchange. There is a strong
pipeline of hospitals under Siloam Hospitals ( part of Lippo Group) that can be injected into the REIT over time.
Since it has large
exposure to Indonesia hospitals, investors don’t have to worry much on
Indonesian Rupiah fluctuation as rental income earned from the Indonesian
hospitals are denominated in SGD, whereas rental income from South Korea is
denominated in USD.
For Indonesian hospital rental calculation, it is subject to formula of 2 x percentage increase of Singapore inflation, capped at 2% when it comes to yearly rental adjustment. Hence, if Singapore experiences higher inflation, it will have a positive effect on rental adjustment.
The REIT’s asset under
management has increased by compounded growth of 16% since 2007 to 2016. It has
also declared and paid out stable and rising dividends over time, which is good
news for existing shareholders!
The REIT’s debt to equity ratio stood at healthy 30% region in 2016 with more than 90% of its debt priced in fixed rate; hence interest rate fluctuation is likely to have mitigated impact on this REIT.
This REIT is listed in Singapore; hence dividend payment will be in SGD.
No comments:
Post a Comment