In the case of tenant bankruptcies, I believe the REITs that will receive the greatest impact are REITs with one or few tenants. Hence, I will be focusing on REITs with high Top tenant contributions here.

We will explore together whether the tenants which pays the bulk of the rental the REIT receives has a sustainable business or not. First up, we have Elite Commercial GBP REIT (ECG REIT).

Elite Commercial REIT (ECG REIT) - 99% revenue from top tenant
Elite Commercial REIT Share Price History (SGX:MXNU) | SG
ECG REIT is at top of the list, with their properties 99% leased to the UK Government. Particularly, these are government agencies which includes Secretary of State for Housing, Communities and Local Government, entities which are constituted under the Crown Body.

Key occupier is Department for Work & Pensions (DWP) which operates Jobcentre Plus Centres in UK. These Jobcentre Plus Centres help people people find work through services such as job hunting programmes and external job vacancies, while it also provides financial support to eligible job hunters.

As a rough gauge with reference to above chart, AA grade investments generally has a 0.23 to 0.38% cumulative chance of default in a 4 to 5 year time frame. Hence, I would say ECG REIT remains largely safe as its "Single-tenant" who is the UK government agencies remains rated as an AA grade entity.

From Financial Times, UK has a current Debt to GDP ratio of close to 100%. This remains lower compared to other developed countries.

Despite the creditworthiness, there remains the risk of shift to online services. Jobcentres are on a declining trend as governments encourage citizens to find jobs, or even to receive training online, through websites like

Unemployment benefits (Universal credit) is also largely online based and this reduces the need for physical space.

ECG REIT also has minimal exposure to Call Centres. They can be susceptible to technology changes too. However, the bulk of revenue comes from the Department of Work and Pensions, and this can be a counter cyclical opportunity too.

The counterargument is that during economic downturns, more people become jobless and require government claims, Hence, this is their selling point, where a recession can lead to a higher need for its Jobcentres all around UK.

I have also dug into the investor presentation, and found that UK government can get out of lease contracts given a year's notice. This does pose some sort of risk if you invest into ECG REIT.

First REIT (First) - 81.59% revenue from top tenant
First REIT kicks off 2016 with a joint acquisition of an ...

This is one of the only 2 healthcare REITs listed in Singapore. It is either Parkwaylife REIT which offers 3% odd dividend yield per year, or this high-yielding Indonesia based REIT which offers as high as 10% during the COVID correction.
First, let us zoom into its revenue generated from Indonesia. From above pie chart, we know that First REIT generated 96.8% of revenue from Indonesia. And, we know that the main tenant is  Siloam hospitals. Let's take a look at annual report 2019 extract below to be sure.

Yes, PT Lippo Karawaci Tbk contributes 81.59% of Gross revenue to First REIT. So, is Lippo Karawaci sustainable?

Previously there was scandals of bribery and whatnot within the Lippo group. We are gona put that aside and focus on whether PT Lippo Karawaci Tbk can keep on paying rent to First REIT.

 This is the stock price performance of PT Lippo Karawaci Tbk. Well, in a time frame of 5 years, they have fallen close to 90%. Why is this so?

This is the part I enjoy the most, digging into the financials of companies. So let's see what we have got..You can dig too here at the company website.

Profit for the year
2016: 1227b Rupiah Profit
2017: (677b) Rupiah Loss
2018: 1662b Rupiah Profit (after accounting for 2,361b worth of Other Income)
2019 (Nine months cumulative): (1.692b) Rupiah Loss (Worsening operating expenses)

Opps, you may feel that profit or loss does not give a good picture, so let's take a look whether the operations of Lippo Karawaci is generating cash.

Net Cash generated from Operations
2016: (408b Rupiah)
2017: (4,930b Rupiah)
2018: (3,409b Rupish)
2019 (Nine months ended): (3.24b Rupiah)

We can see significant increases to their payments to vendors and suppliers among the Cash Flow statement. Wells, with all these information, is the business really sustainable?

I would say.. maybe. Maybe, things get better, maybe not. If maybe is not a good enough answer, then you should not invest into First REIT?

Wait, how about we take a look at PT Siloam International Hospitals Tbk?

It is the operator of hospitals that is occupying the First REIT properties. It is a 51.05% owned by Lippo Karawaci. The negative cashflow depicted above could be due to the conglomerate nature of Lippo Karawaci where it has businesses in real estate, hospitality and retail sectors too.
This is the stock price performance of Siloam Hospitals.

Latest results I can obtain about Siloam International Hospitals from its 9 months ended 2019 financial statements is that it remains profitable with 54.87b Rupiah in profits and 357b in Net cash generated from operating activities.

The snapshots from shows that PT Siloam Hospitals Tbk remains profitable throughout 2015 to 2018 too. It is able to generate positive cashflow from operations too.

Now, with the potential growth in Indonesia's medical sector, investing into First REIT does not seem like such a bad choice?

To summarize, Lippo Karawaci is the sponsor of First REIT, together with OUE Lippo Health. Siloam International Hospital is the operator of the hospitals. Well, where does the rent paymentts to First REIT come from?

I believe the rents come from Lippo Karawaci as seen in First REIT annual report 2019. Note PT Siloam International Hospitals seems to be responsible only for 1.68% of the rental income.

However, I found out that Lippo Karawaci sponsors PT Siloam Hospitals 80% of the rental payments to First REIT -

Let's say, if Lippo Karawaci lets Siloam Hospital deal with First REIT directly, will Siloam Hospitals be able to pay the rental?

Let's extrapolate 9M2019 net profits (54.87b Rupiah) of PT Siloam International Hospital to be 73.16b Rupiah per year. This translates to be $7m SGD.

First REIT's Gross revenue in 2019 is $115m SGD. Well, $7M SGD is nowhere near 81.59% of $115m SGD it can receive from Lippo Karawaci. It does seem that Siloam International Hospitals cannot afford the current rental rates.

It is getting really complex here, let's move on to the next REIT.

Parkway Life (PLife REIT) - 58.5% revenue from top tenant
Parkway Life REIT Target Price (SGX:C2PU) | SG
Next up, we have ParkwayLife REIT. Isn't this the REIT we always praise? Be it the defensiveness nature, or the steady and rising dividend it pays out. Here's the top tenant via gross revenue that pays Parkway Life REIT lease payments - Parkway Hospitals Singapore Pte Ltd. Data taken from Annual report 2019 of the REIT.
Who owns this Parkway Hospital Singapore Pte Ltd?
From the investor presentation of Parkway Life REIT, we can gather that IHH Healthcare Berhad is the 100% beneficial owner of Parkway Hospital Singapore Pte Ltd (let's call this entity PHS). Once again, PHS pays approximately 58% of rental payments to Parkway Life REIT.

So, is PHS (or IHH) a sustainable business? Let us take reference to IHH's financial performance.

IHH Berhad is a company listed on KLSE. In fact, it is dual-listed. It trades on SGX under ticker symbol Q0F too. Below is stock price performance of IHH on KLSE (Kuala Lumpur stock exchange)
The stock price seems okay, as it did not rise or fall significantly in the past 5 years. So, how about its Cash Flow generated from operations?

*We are using Cash flow statement because we wish to see if the business generates cash in order for the business to pay Parkway Life REIT the rental payments*

IHH Berhad generates bulk of their revenues from the Singapore businesses - Gleneagles, Mount Elizabeth and Parkway East Hospital.

Cash Flow generated from operations
2017: 2.261b RM
2018: 1.86b RM
2019: 2.447b RM

This seems to be a different story compared to Lippo Karawaci. It does show that IHH Berhad can afford to keep paying Parkway Life REIT the rental payments.

One more point to note, is that Lippo Karawaci owns only 8.5% ownership of First REIT, while Parkway owns 35.6% ownership of Parkway Life REIT.

Is there more of a misalignment of interest in the First REIT - Lippo Karawaci partnership?

Should I also cover the next few REITs?

In terms of proportion of Top tenant revenue contribution, the REITs are ranked in this following sequence:

Rank 1: Elite Commercial GBP REIT at 99%
Rank 2: First REIT at 81.59%
Rank 3: Parkway Life REIT at 58.5%
Rank 4: iReit Global at 45.80%
Rank 5: Keppel DC at 41%
Rank 6: Lendlease Global at 29%
Rank 7: Starhill Global at 22.9%

We have covered the top 3, comment below if you would like me to cover the next 4 :)

Please share this article to your friends who all these 7 REITs too :)

Meanwhile, the microphone I have ordered is reaching Singapore soon! If I want to teach REITs investing to people, I might as well do my best. Meanwhile I am recording the videos with whatever tools I have at home, but still it is not good enough. I want people to enjoy better sound quality at least. Better slides. And, better explanations.

It has to be at least as good, if not better than the $3,888 courses you find online (Or, $388 because most course providers are slashing prices due to COVID).

I am not selling a get rich quick scheme here. Investment ideas I preach is not sexy and will not make you an instant millionaire. Hence I really need your support to Like, Share and Subscribe to my Youtube Channel (if you find the videos good). Good investing, in my opinion, takes time and patience.

So far, I have covered pretty much the basics of REITs and how it plays out as an investment compared to stocks, or a physical condominium.

I am looking forward to cover topics such as nature of each type of REIT sector starting from Retail. I will also teach on valuation metrics and when to invest into a REIT or sell.

My aim is simple, to help you amalgamate information from different sources, and package it to help you invest successfully. You really should not be paying thousands to learn investing. You shouldn't.

Start your REITs investing journey here, today -

~Mr Llama
Not an insurance agent, financial adviser, or banker.
Just someone who's sick of the rat race.

Excitez! It is arriving!


  1. EC World REIT. Seems like most of their income comes from Forchn or wholly owned subsidiaries of Forchn (basically Forchn).

  2. okie! thanks for suggestion!

  3. Re first REIT, please note lippo is the master tenant and Siloam is the subtenant. That's why most of the rental comes to first REIT through lippo. Even though it's actually Siloam that pays the rent.

    Lippo is just making money as a middleman. They collect X from Siloam and pay Lippo X-x, keeping x for themselves.

    1. i see! thanks for your input! I purely based what i write from annual report, as it is stated that Lippo karawaci is the tenant. Perhaps, could you lead me to the correct info?

      Thank you

  4. Perhaps the most impactful to SREITs on this subject of Top Tenant GRI Contribution percentage is from what that has happened to Mapletree North Asia Commercial Trust (MNACT). The Top Tenant of MNACT is The Festival Walk (FW) Mall in Kowloon Tong, HK,... which contributed,.. 65% (if my memory serves me correctly) of the GRI of MNACT. We saw what happened to the MNACT when the protestors damaged FW Mall to the extent that it has to be closed for repairs.

    Immediately after this event, the manager took steps to acquire three properties in Japan to mitigate this tenant concentration risk, but still, we could just scrape-off a few percentage points off from the FW slice of the MNACT GRI pie.

    Tenant Concentration Risk is a very real risk indeed.


    1. it is unfortunate for MNACT to face multiple "freak" incidents that cause their bulk of rental to be affected. Fortunate for shareholders that there is insurance payout for the damages during the HK riots.

      I still feel Festival walk should be seen as a multi-tenanted exposure, instead of a single source of income. Less away these "freak" incidents, their rental source is still rather diversified i would say.

      You do make a good point that rental income of a REIT is better off being spreaded across a few properties, or even countries.

      Thank you for your good points

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