Proposed divestment of eight hospital assets and three non-hospital assets for aggregate net proceeds of S$464.2m, with a put option on the remaining six Indonesian hospital assets.
What was announced by First REIT?
As part of its strategic review, First REIT announced that it is looking to divest eight hospital assets for IDR5.1t (S$389.2m) and three non-hospital assets for IDR1.1t (S$82.4m).
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First REIT has also been granted a put option by Siloam to divest the remaining six Indonesian hospital assets for at least IDR3.95t (S$294.8m) before 31 Oct 2026. This allows it to structure its exit from Indonesia in two tranches, cushioning DPU impact for FY26.
What is the financial impact?
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Had the divestments been completed on 1 Jan 2025, pro forma FY25 DPU would have been 35.9% lower at 1.39 Singapore cents, or 14.7% lower at 1.85 Singapore cents including the special distribution (versus actual FY25 DPU of 2.17 Singapore cents).
Had they been completed on 31 Dec 2025, pro forma aggregate leverage would be reduced significantly from the 42.1% reported to 16.7%.
What does this mean for unitholders?
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Above is an excerpt from a report by OCBC Group Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
