THE manager of First Real Estate Investment Trust (Reit) said on Monday (Jan 13) that it received a preliminary non-binding letter of intent (LOI) from Siloam International Hospitals to acquire the Reit’s portfolio of hospital assets in Indonesia.
Siloam is the existing operator and tenant of these assets.
The board of First Reit’s manager will conduct a strategic review to assess the LOI and explore all strategic options for the trust, the manager said in a bourse filing.
“Through the strategic review, the board is committed to undertaking a rigorous process to consider all options relating to the business of First Reit, which may include but are not limited to, exploration of joint ventures, strategic partnerships, asset acquisitions and/or asset divestments,” said the manager.
This will be done with the view of delivering “sustainable, long-term value” to First Reit’s unitholders, the manager added.
However, there is no certainty that any transaction will arise from the strategic review or LOI, or that a binding agreement will be reached regarding any of First Reit’s assets, it noted.
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First Reit has 15 properties in Indonesia, comprising 11 hospitals, two integrated hospitals and malls, one integrated hospital and hotel, and one hotel and country club.
Its Indonesian healthcare properties are operated by Siloam, a private healthcare player listed on the Indonesia Stock Exchange. Siloam is majority-owned by a fund managed by CVC Capital Partners.
In First Reit’s 2023 annual report, the group noted that Siloam was its largest tenant.
The healthcare provider and its subsidiaries contributed 38.7 per cent of First Reit’s rental income in FY2023, excluding FRS 116 rental straight-lining adjustments.
Units of First Reit closed flat at S$0.255 on Monday, before the announcement.
