First REIT’s Nine-Month DPU Falls 12.7% as Debt Shrinks: What Comes Next for Distributions?

First Real Estate Investment Trust (SGX: AW9U) reported a distribution per unit (DPU) of 1.44 Singapore cents for the nine months ended 30 September 2026, down from 1.65 cents a year earlier. For the third quarter alone, DPU was 0.46 cents. The 27 October business update gives unitholders two developments to weigh: a smaller regular payout and a much lighter debt load following Indonesian asset sales. [S3, p. 1] [S3, p. 2]

Why the regular payout fell

Rental and other income declined from S$75.5 million to S$68.4 million over the nine months. The amount available for distribution fell from S$34.8 million to S$30.6 million. With more units entitled to a distribution, the decline in DPU was steeper than the decline in the distributable amount. [S3, p. 1]

The manager attributed the weaker Singapore-dollar results mainly to depreciation of the Indonesian rupiah and Japanese yen, alongside lost income from divested Indonesian properties. It said rental income from Indonesian and Singapore properties rose in local-currency terms, but that did not prevent the reported decline. A smaller portfolio also means past rental income cannot simply be carried forward when judging future payouts. [S3, p. 1] [S3, p. 2]

Third-quarter DPU was 0.46 cents, compared with 0.48 cents in the second quarter and 0.52 cents in the third quarter of 2025. The latest distribution comprises 0.03 cents of taxable income and 0.43 cents of tax-exempt income per unit. Units are scheduled to trade ex-distribution on 5 November 2026, with payment scheduled for 18 December 2026. [S4, p. 13] [S3, p. 4]

Asset sales changed the balance sheet

First REIT reported S$194.6 million of debt and gearing of 27.5% at 30 September 2026, against S$458.0 million and 42.1% at the end of 2025. The manager linked the lower gearing to repayment of its S$300 million loan facilities and a yen-denominated social loan. It also reported that 75.7% of debt was fixed-rate or hedged at the September date. Less debt gives the trust more room to manage financing costs, although it does not replace rental income lost through the sales. [S4, p. 10] [S3, p. 2]

The September debt figures preceded another repayment. First REIT said it fully redeemed its S$100 million bonds on 19 October 2026. The manager estimated that gearing would have been 15.6% pro forma had that redemption occurred by 30 September; that figure is an illustration, rather than the reported September gearing ratio. [S3, p. 3] [S4, p. 10]

What the special distribution can—and cannot—tell us yet

The manager said consideration for eight Indonesian hospitals and three other properties was received on 24 September, and that the divestments completed on 20 October. It plans to declare a special distribution across the fourth quarter of 2026 and first quarter of 2027. The update gives no amount or entitlement dates for that special payout, so it cannot yet be treated as a known addition to the regular DPU. [S3, p. 2]

There is also a limit to what this business update shows about cash backing the payout: it does not include a nine-month cash-flow statement. The latest supplied interim cash-flow statement covers only the first half of 2026. It reports S$30.5 million of operating cash inflow, while S$6.7 million of interest paid appears under financing activities. Those earlier figures should not be presented as nine-month cash coverage. [S5, p. 13] [S5, p. 14]

For now, the answer is mixed. First REIT has reduced its financing burden, but its reported regular DPU and rental income have fallen. The next useful evidence is the declared size of the special distribution and results showing how the smaller property portfolio supports recurring distributions. [S3, p. 1] [S3, p. 2] [S4, p. 10]