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Tuesday, June 3, 2025
Gursehaj Dhillon's Minion-Themed Birthday
Taking Religare beyond India
The trust aims to expand its portfolio to other Asia-Pacific markets, says its CEO Gurpreet Dhillon, reports NISHA RAMCHANDANI
A YEAR into its listing on the Singapore Exchange (SGX), Religare Health Trust (RHT) is considering expanding its portfolio beyond India to include other Asia-Pacific markets, even as it continues to push for growth from existing assets.
"The first year was about stabilising the portfolio, about delivering everything we set out to our investors," Gurpreet Dhillon, RHT's CEO told BT in an interview. "The next year is going to be about building on that foundation, looking for growth opportunities both inside the portfolio and outside."
Mr Dhillon assumed the role of chief executive in May this year, taking over from Ravi Mehrotra, currently executive chairman, in order to separate the roles of CEO and chairman.
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Singaporean companies believe in India despite economic woes
Singaporean companies still believe in long-term opportunities in India despite the recent plunge in rupee value and the weakening economic outlook, according to a media report.
Singapore property group Ascendas, which has real estate assets in Bangalore and Chennai, believed in its long-term growth, its president and chief executive Manohar Khiatani said.
"It has a competitive, qualified labour force and global companies will continue to choose India to conduct their businesses," The Straits Times Monday quoted Khiatani as saying.
"The country's real estate sector is in its growing phase and we believe key sub-sectors including industrial, IT and commercial space will continue to see steady demand," he said.
Singapore-listed Religare Health Trust (RHT), which has a portfolio of health-care assets in India, was banking on the Indian market potential, especially citing the shortage of hospital beds relative to rising demand.
RHT chief executive Gurpreet Dhillon said strong and sustained growth in the Indian health-care sector was being driven by solid fundamentals such as a growing middle class, an ageing population and changing disease profiles.
India has a "huge untapped demand but limited supply" of serviced residences to cater to rising numbers of expatriates and travellers, added Alfred Ong, managing director for strategic development and Indian market at The Ascott which has two serviced residences in Bangalore and Chennai and would open five more over the next few years.
The general consensus about India was still positive, even though the country faced challenges in the short-run, said Benjamin Yap, regional director for South Asia at trade promotion agency, International Enterprise Singapore.
Yap saw new opportunities for Singapore companies in the infrastructure, manufacturing and consumer goods sectors in the Tier 2 cities such as Pune, Lucknow and Visakhapatnam, especially after growth saturates in Tier 1 cities like Mumbai, New Delhi and Bangalore.
"India continues to pursue economic liberalisation, creating opportunities for foreign investors, including Singapore companies. What we are seeing is a short-term issue which should not detract companies from the market's long-term potential," Yap said.
The Straits Times also cited other business executives expressing concern about India's red tape, complicated tax environment and challenges of dealing with bureaucrats.
International media reports have highlighted foreign investors pull out of Indian stocks and bonds on the back of economic uncertainties.
Religare Health Trust promotes Gurpreet Singh Dhillon as CEO
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The Board of Religare Health Trust announced the appointment of Gurpreet Singh Dhillon as chief executive officer.
Mr Gurpreet Singh Dhillon, 29, will be responsible in managing the daily operations relating to Religare Health Trust Trustee Manager Pte. Ltd. ('RHTTM') and Religare Health Trust.
Mr Gurpreet Dhillon is a founding shareholder of Religare Enterprises Ltd ('REL'), the listed entity that holds RHTTM. Since being set up in 2001, REL has grown to become one of India’s largest Financial Services groups with a leading presence in sectors Broking, Insurance, Lending and asset management. He has been instrumental in helping REL build its investment banking and asset management ventures in emerging markets.
From 2005 to 2011, Mr Dhillon was on the Board of Directors of Religare Capital Markets Plc, the investment banking arm of REL which focuses on emerging markets. Prior to his appointment as CEO, Mr Dhillon was COO of RHTTM, where his responsibilities included overseeing operations and investments of RHT. Mr Dhillon has deep corporate finance and real estate experience, having worked on a number of Indian real estate transactions.
Screening Of Padmaavat With Shahid Kapoor
Gurpreet and Nayantara Dhillon recently hosted a screening of Bollywood epic Padmaavat in benefit of the charity Food from the Heart. The expat couple from Delhi invited the movie's protagonist Shahid Kapoor to grace the event, which started with a high tea at their home in the presence of their close friends. They then moved on to the Gold Class cinema in Vivocity, where they enjoyed the screening of the highly controversial Sanjay Leela Bhansali period drama, which also stars actors Ranveer Singh and Deepika Padukone.
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SINGAPORE PRESS-Religare Health Trust sets vision beyond India - Business Times
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RELIGARE Health Trust (RHT) on Wednesday reported a 1.4 per cent rise in distributable income to S$15.3 million for the fourth quarter ended March 31, even as revenue for the period slid.
Distribution per unit (DPU) for the quarter edged up 0.5 per cent to 1.91 Singapore cents from a year ago.
Revenue excluding straight lining fell 2.8 per cent to S$33.8 million, while net service fee and hospital income slid 3.4 per cent year on year to S$23.3 million.
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SINGAPORE PRESS-Religare Health Trust sets vision beyond India - Business Times
A year into its listing on the Singapore Exchange (SGX), Religare Health Trust (RHT) is considering expanding its portfolio beyond India to include other Asia-Pacific markets, even as it continues to push for growth from existing assets.
"The first year was about stabilising the portfolio, about delivering everything we set out to our investors," Gurpreet Dhillon, RHT's CEO told BT in an interview. "The next year is going to be about building on that foundation, looking for growth opportunities both inside the portfolio and outside."
Its preference would be to invest in more stable markets, such as Australia or Japan, to help offset the risks in emerging markets such as India.
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2017 Singapore REITs Symposium Review: Valuable Insights From CEOs
Heartland Boy has always felt that time spent with Management would improve his investment outcome. Somehow, seeing Management address questions in person are not the same as reading the answers from the various analyst reports. However, ever since he was posted to Jakarta, he has found it increasingly difficult to gain access to management. For instance, most of the AGMs are held on weekdays. Therefore, he gladly paid the $10 registration fee to attend the 2017 Singapore REITs Symposium held on 27 May at Suntec Convention & Exhibition Centre. The REITs Symposium is organized by REIT Association of Singapore (‘REITAS’). An overwhelming 26 REITs listed on the Singapore Stock Exchange set up booths this year. At the 2017 Singapore REITs Symposium, Heartland Boy went from booth to booth to gain a better understanding of the various participating REITs and Business Trusts. He also took this opportunity to speak to the CEOs of Viva Industrial Trust, BHG Retail REIT, RHT as well as the investor relations staff from Soilbuild REIT. Here is his review of the 2017 Singapore REITs Symposium and the key insights from the various CEOs on their respective businesses.
Informative Booths Set Up By The Participating REITs For Interaction With The Audience
1. Q&A With Chan Iz-Lynn, CEO of BHG Retail REIT
On strategic investors’ waiver of their DPU (‘Distribution Per Unit’) entitlement
CEO: “At the recent 1Q2017 results announcement, the waiver by strategic investors on their DPU entitlement had reduced from 30% in 2016 to 27.5% in 2017. Despite that, we managed to increase our DPU in 1Q2017 as compared to 1Q2016. We have put in place various strategies for our existing assets to increase DPU:
- Positive rental reversions expected from our multi-tenanted malls, especially since up to 27.7% of our portfolio by gross rental income are up for renewal in 2017.
- The Asset Enhancement Initiative (‘AEI’) at our mall in Chengdu has outperformed our expectations. Contribution to bottom line as a result of the AEI will be felt progressively till the end of the year.
- At our mall in Beijing, we are looking to shrink the space afforded to some tenants. We hope to be able to bring in more tenants and more rental revenue after optimising the space allocation.
Therefore, these various strategies provide us the confidence that we will be able to maintain our DPU once the entitlement period is over by 2020.”
On the Sponsor’s large pipeline
CEO: “There are 14 projects from the Sponsor that we have a Right Of First Refusal (‘ROFR’) on. However, most of these assets are either under development or too young to have reached a stabilised state. Therefore, they are not yield-accretive at this moment and we do not want to acquire irresponsibly. Therefore, our team is working hard to look for third-party retail malls around China as well as the rest of the world. With a global investment mandate, we are confident of acquiring retail malls that are immediately yield-accretive.”
2. Q&A With Wilson Ang, CEO of Viva Industrial Trust
On the final settlement reached with the vendor of Jackson Square
CEO: “We have received an additional $1.7mil security deposit from Jackson International Private Limited’s subsidiaries. These subsidiaries are in the business of self-storage and childcare and their leases expire in either 2019 or 2020. Collectively, the subsidiaries take up 24% of the Net Leasable Area at Jackson Square and contributed 19% of gross income in 1Q2017.”
Heartland Boy did a quick calculation back at home. Given that $1.56 mil of rental support was utilized in FY2016 for Jackson Square, this implies that total actual gross rental income received in FY16 was $$10.04 mil. Jackson Square’s subsidiaries would have contributed $1.9 mil. Therefore, the additional $1.73 mil of security deposits could potentially last another 10 months in the event of default. Heartland Boy thinks that this is a great outcome for the unitholders of VIT.
HLB: “Please provide an estimate of the operating costs of Jackson Square. Do you think it will exceed $2 million per annum?”
CEO: “We have an internal team with the relevant property management expertise. We will be calling for a tender soon and we do not foresee it to exceed $2 million per annum.”
On Viva Business Park (‘VBP’)
CEO: “Phase 3 has already achieved TOP. The pre-committed tenants are commencing fitting out at this moment. There is a good tenant mix such as a lifestyle electronics retailer as well as a rock-climbing service provider.”
Heartland Boy thinks that it is likely these anchor tenants may have negotiated for some “rent-free” periods to fit out the leased space. Therefore, these pre-committed tenants should only contribute meaningfully to DPU from 3Q2017 onwards.
HLB: “I think unitholders are always concerned about the short land lease of VBP. May I understand your team’s strategy to increase the land tenure?”
CEO: “VBP is currently under the jurisdiction of HDB. Next year, industrial projects will be transferred from HDB to JTC. JTC has an early renewal policy for buildings with less than 15 years remaining in their land leases. Therefore, after the transition, we will commence renewal talks with JTC for VBP. We are optimistic on our chances as (i) VBP was rezoned from high-tech industrial to business park and (ii) we have displayed our commitment by spending more than $80 million in AEI to utilize the white space.
On future acquisitions
CEO: “Owing to the positive demand-supply outlook for business parks, the valuation for this asset class has compressed. Contrast this to the high yield that VIT is currently trading at, it will be difficult to purchase yield-accretive business parks. Therefore, we are more likely to purchase warehouses or factories. In particular, we like cold chain logistics of the food industry as they tend to be more stable and resilient.”
Heartland Boy With Mr Wilson Ang, CEO of Viva Industrial Trust
3. Q&A with Gurpreet Singh Dhillon, CEO of Religare Health Trust
On India’s demonetization policy
CEO: “As an estimate, about 30% of our revenue is variable. In addition, about 75% of our customers pay by cash. Therefore, India’s demonetization policy has affected our performances for the past 2 quarters as people delayed discretionary treatments in order to preserve cash. However, we do witness greater monetary stability now and expect our hospitals to perform better from henceforth.”
On the change in hedging policy from 100% to 50%
CEO: “We realized that we have overpaid in premiums for hedging in the past. Therefore, we have reduced our hedging policy from 100% to 50%. We think that this is a right balance to take between stability of DPU in SGD for unitholders and possible upside from the strengthening of the Indian Rupee.”
On reducing DPU payout ratio rather than increasing debt
CEO: “It boils down to an efficient utilization of capital. We do not think that it is sustainable to continue to pay 100% of our cashflow to unitholders. Therefore, we have chosen to fund our working capital requirements from internal cashflow rather than external debt despite our low gearing ratio.”
4. Q&A with Investors Relations Team from Soilbuild REIT
On the leasing conditions at 72 Loyang Way
Soilbuild: “The last of the rental deposits collected owing to the default of Technics Offshore Engineering will expire this quarter. We have obtained waiver from JTC to lease 30% of the space to tenants from the non-oil & gas sector. So far, we have managed to lease out 9.9% of the space at 72 Loyang Way. We continue to receive enquiries from tenants in the aviation and logistics industry. As for the other 70% of the space reserved for the oil & gas industry, JTC requested that we find a single user who will be able to utilize the water features in front of the property. Given the subdued oil and gas macro-environment, we foresee challenges in leasing out this remaining space.”
REIT Investing In Singapore
Programme Outline And Participating REITs at 2017 Singapore REITs Symposium
Besides the informative booths by the various participating REITs, participants at the 2017 Singapore REITs Symposium could also learn more about the complementary services offered by ShareInvestor and InvestingNote. In addition, Heartland Boy also attended the panel discussion in the morning whereby Philip Capital explained the strong diversification attributes that a REIT ETF can offer. A REIT ETF is an excellent product for those who may not have the time or expertise to sieve out the best REITs for 2017 but yet would still like to participate in REIT investing. Afterall, Singapore REITs are still a desirable cherished asset class to have in a balanced portfolio. It is able to provide high and stable dividend yield ranging from 6% to 7% with moderate risks. For those who wish to better understand the REIT industry, Heartland Boy has written a glossary of REIT jargon typically used in the Singapore REITs industry.
RHT HEALTH TRUST: Taps into Pulse of Indian Boom
RHT Health Trust has a portfolio valued at S$1.1 billion, with 12 clinical establishments, 4 greenfield clinical establishments and 2 operating hospitals in 13 Indian states.
Gurpreet Dhillon's salt-and-pepper look lends him clout beyond his years.
"I became CEO at 29, and now, I can't imagine myself doing anything else with my life. Running RHT - that's my passion," he added. |
Rosy Outlook
RHT, which listed on Singapore Exchange in October 2012, has a market capitalisation of S$790 million. It is the first business trust on SGX that owns India-based healthcare assets.
Religare, a Latin word that means "to bind together", is paired with the symbol of a four-leaf clover. Each leaf of the clover carries a special meaning - hope, trust, care and good fortune.
RHT's portfolio comprises 12 RHT Clinical Establishments (CEs), four greenfield CEs, and two operating hospitals located across India, valued at S$1.1 billion. CEs are medical institutions with in-patient beds that provide diagnosis and treatment of diseases.
RHT's sponsor, Fortis Healthcare Ltd, which is listed on the Bombay Stock Exchange, owns approximately 28% of the trust. RHT has a Right of First Refusal over CEs owned by Fortis.
Fortis Healthcare is a chain of super specialty hospitals in India.
Between 2013 and 2016, the trust averaged total annual revenues of S$114.6 million and an annual distribution per unit (DPU) of 7.8 Singapore cents.
The healthcare sector in India - the world's second-most populous country with about 1.3 billion people - has seen rosy growth, and the prognosis remains good.
Valued at about US$100 billion today, the market is seen expanding to US$280 billion by 2020, reflecting a compound annual growth rate (CAGR) of 22.9%, according to a January 2016 report by the India Brand Equity Foundation (IBEF).
India's healthcare spending was estimated at 5% of gross domestic product (GDP) in 2013, and this is expected to remain steady through 2016, according to a 2015 industry report by Deloitte that cites data from the Economist Intelligence Unit (EIU).
Total healthcare spending in local currency terms is projected to rise at an annual rate of over 12%, from an estimated US$96.3 billion in 2013 to US$195.7 billion in 2018, the Deloitte report said, citing EIU data.
| ♦ Underserved Market | ||||||||||||||
Key growth drivers include a burgeoning middle class and an evolving disease profile, Dhillon noted. "The demand-supply gap is quite substantial - in most Indian cities, there is a huge shortage of hospital beds. We continue to see growth opportunities in this underserved market," he added.
The Indian government is also rolling out a universal health plan that aims to provide free drugs, diagnostic services and insurance for serious ailments. | ||||||||||||||
Underlying Strength
Meanwhile, the medical tourism industry in India is forecast to expand at a CAGR of 20% - from US$3 billion in 2015 to US$8 billion by 2020. The number of people arriving for medical treatment is also set to double over the next four years, as cost of major surgeries in India is approximately 20% of that in developed markets, IBEF data showed.
What India needs to do is build better supporting infrastructure for critical care patients arriving in the country and travelling to their respective hospitals for medical treatment. RHT Health Trust |
"What India needs to do is build better supporting infrastructure for critical care patients arriving in the country and travelling to their respective hospitals for medical treatment," Dhillon said.
"The extension of e-visas or visas on arrival to medical tourists is also a step in the right direction."
Apart from riding on the industry's robust outlook, RHT has an edge over the competition in many respects, Dhillon noted.
Although the trust's mandate includes Asia-Pacific emerging markets as a whole, the team focuses purely on India, where its expertise lies.
"What we do differently from other healthcare trusts listed in Singapore is our focus on high-end medical care - there are no nursing homes or ancillary healthcare structures in our portfolio."
RHT also targets the sector purely from an infrastructure perspective. "Most investors focus on the operators, but we look at owning infrastructure supporting the operating entity, such as land and buildings, after which, we give the operator multi-year contracts to run the hospitals," he noted.
These long-term contracts provide stability for unitholders. "There are no short-term leases and thus, no economic uncertainty that will impact our financial performance. Over the last four to five years, we've recorded stable growth annually," he added.
For the financial year ended 31 March 2016, RHT grew its distributable income by 6% in Singapore dollar terms, and maintained operating margins above the 60% mark, without adding capacity or deploying capital for acquisitions.
"That gives you an idea of the strength of the underlying growth in our portfolio, as well as the healthcare sector in the country."
| ♦ Tuned In | |
Now that RHT has established a stable growth base, it is looking at expanding more aggressively through organic and inorganic means. "Our day-to-day focus is organic, on our brownfield projects, where we add capacity to our existing CEs," Dhillon added.
"We are excited to work with Fortis, but at some point, we want to work with another operator, to diversify away from the single-operator risk," he added. |
| Year ended 31 March (S$000) | FY2016 | FY2015 | FY2014 | FY2013# |
| Total Revenue (ex straight-lining) | 138,447 | 130,590^ | 93,508^ | 110,450 |
| Distributable Income | 61,583 | 58,166 | 46,694 | 44,834 |
| Distribution per unit (DPU) | 7.72 | 7.32 | 8.19* | 7.90~ |
| Quarter ended 30 June (S$000) | 1QFY2017 | 1QFY2016 | YoY Change |
| Total Revenue | 35,391 | 35,369 | 0.1% |
| Distributable Income | 15,134 | 15,443 | -2.0% |
| Distribution per Unit (DPU) | 1.798 | 1.940 | -7.3% |
*based on common units issued
#RHT was listed on 19 October, 2012. FY2013 YTD results are extrapolated for the full year
^Excludes gain in connection with acquisition of Mohali Clinical Establishment and GST refunds
~Annualised DPU
Source: Company data
| Outlook | ||
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RHT Health Trust
RHT Health Trust is the first business trust listed on Singapore Exchange with a portfolio of India-based healthcare assets. Its investment mandate is principally to invest in medical and healthcare assets and services in Asia, Australasia and other emerging markets. RHT's portfolio as of 31 March 2016 comprises 12 Clinical Establishments, four Greenfield Clinical Establishments and two Operating Hospitals located across India.
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