First REIT poised to lose rental support from sponsor and master lessees


Singapore-listed healthcare REIT, First REIT, looks set to lose the rental support it has been enjoying from its sponsor and master lessees.

Note: This story, which was first published at 11.00 am on 1 June, has since been updated with new information at market close.

First REIT has a portfolio of 20 properties across Indonesia, South Korea, and Singapore, most of which are operated by Siloam Hospitals.

Under triple net lease structure agreements that have been in place since its IPO, First REIT receives rental income from properties in Indonesia and Singapore in SGD, while rent from South Korea is received in USD.

The structures also feature built-in annual rental escalations of two times the percentage increase in Singapore consumer price index (CPI) for the Indonesian properties, and 2% for Singapore and South Korea properties.

These rent structure agreements protect First REIT unitholders from inflation, and currency fluctuations.

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