First REIT - Phillip Securities 2025-01-16: Receives Offer For Its Indonesian Hospitals

• First REIT received a preliminary non-binding letter of intent (LOI) from PT Siloam International Hospitals Tbk (Siloam) to acquire First REIT’s portfolio of 14 Indonesian hospitals (72% of AUM). See First REIT's announcement dated 13 Jan.

Our view

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• the proceeds from the sale could provide First REIT with more financial capacity for future acquisitions in developed markets such as Australia and Japan, and
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Siloam is the current tenant and operator of the hospitals and is 65% owned and controlled by CVC Capital Partners.

What’s next?

• The board has appointed a financial adviser to assist in conducting the strategic review to explore and evaluate all options for First REIT. Options include but are not limited to:
  1. exploration of joint ventures,
  2. strategic partnerships, and
  3. asset acquisitions and/or asset divestments.
• If a deal materialises, First REIT may use the divestment proceeds to acquire assets in developed markets like Australia and Japan, aligning with its First REIT 2.0 growth strategy, which aims to have assets in developed markets account for more than 50% of AUM by 2027. A portion of the proceeds could also be returned to unitholders.

Maintain BUY

• Read more at SGinvestors.io.

Darren Chan Phillip Securities Research | https://www.poems.com.sg/ 2025-01-16 SGinvestors.io

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