First REIT - OCBC Investment 2017-10-16: Acquisition In Yogyakarta Together With LMIRT

FIRST REAL ESTATE INV TRUST AW9U.SI

First REIT - Acquisition In Yogyakarta Together With LMIRT

First REIT (FREIT) has entered into a JV with Lippo Malls Indonesia Retail Trust (LMIRT) involving the joint acquisition of an integrated development from its sponsor, PT Lippo Karawaci Tbk, in Yogyakarta, Indonesia.
The hospital component, known as Siloam Hospitals Yogyakarta (SHYG), comes at a purchase consideration of S$27.0m and will be borne by FREIT. SHYG has a gross floor area of 12,474 sqm with a maximum capacity of 220 beds.
This transaction is accretive, given that SHYG will generate a rental yield of 9.0% based on the initial base rent of S$2.43m per annum and will finance this by a combination of a drawdown from its debt facilities and internal cash. On a pro forma basis, DPU for 6M2017 would have risen slightly from 4.28 S-cents to 4.30 S-cents.
We maintain our HOLD rating and fair value estimate of S$1.38.

Joseph Ng OCBC Investment | http://www.ocbcresearch.com/ 2017-10-16

OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 1.380 Same 1.380