First Real Estate Investment Trust (AW9U) has signed binding agreements to divest eight Indonesian hospital properties and three non-core assets for a combined 471.6 million Singapore dollars, subject to unitholders’ approval.
The trust’s subsidiaries agreed today to sell 100 per cent stakes in eight hospital companies to long-time tenant PT Siloam International Hospitals for 5.1 trillion rupiah (about 389.2 million Singapore dollars). The properties comprise Siloam Sriwijaya (Palembang), Siloam Hospitals Purwakarta, Siloam Hospitals Lippo Village, Siloam Hospitals Kebon Jeruk, Siloam Hospitals Bali (Denpasar), Siloam Hospitals Kupang, Siloam Hospitals Baubau and Siloam Hospitals Manado.
Separately, First REIT will dispose of two non-core assets—Lippo Plaza Baubau and Hotel Aryaduta Manado—to PT Lippo Karawaci subsidiaries for 53.3 million Singapore dollars, and grant a prepaid lease over Lippo Plaza Kupang to PT Bumi Sarana Sejahtera for 29.1 million Singapore dollars.
After estimated transaction costs of 7.4 million Singapore dollars, net proceeds of about 464.2 million Singapore dollars are expected. The manager intends to use approximately 362.7 million Singapore dollars to repay existing borrowings, distribute around 9.7 million Singapore dollars as a special distribution over two quarters, and allocate any balance for capital expenditure and general corporate purposes.
Pro forma calculations show that, had the sales completed on Jan, 1 2025, FY2025 distributable income would have fallen from 45.8 million to 29.2 million Singapore dollars, cutting distribution per unit from 2.17 to 1.39 Singapore cents (1.85 cents including the special distribution). Aggregate leverage would fall from 42.1 per cent to 16.7 per cent, with annual interest savings estimated at 18.8 million Singapore dollars.
The disposals constitute interested person transactions under Singapore Exchange rules and require approval from independent unitholders at an extraordinary general meeting to be convened. Completion of the transactions is targeted for Aug, 2026.