SINGAPORE (THE BUSINESS TIMES) - First Real Estate Investment Trust (First Reit) will divest Siloam Hospitals Surabaya at an agreed property value of 430 billion rupiah (S$40.9 million), subject to post-completion adjustments.

The Reit acquired Siloam Hospitals Surabaya in 2006 for $16.8 million as part of its initial portfolio.

Completed in 1977, the development comprises five integrated purpose-built hospital buildings ranging from two to five storeys, the Reit manager said in a bourse filing.

Siloam Hospitals Surabaya, in the city of Surabaya in Indonesia, sits on a land area spanning 4,306 sq m. It has a gross floor area (GFA) of 9,065 sq m and houses 162 hospital beds.

The agreed property value of 430 billion rupiah represents a 143.2 per cent premium over First Reit's original purchase consideration of $16.8 million, the manager noted.

If the proposed divestment is successful, the weighted average age of property computed on a GFA basis for the portfolio of First Reit will improve to 15.7 years from 16.2 years as at Dec 31, 2021, and on a pro forma basis, including the 12 nursing homes in Japan acquired from OUE Lippo Healthcare.

First Reit holds the stake in Siloam Hospitals Surabaya through Primerich Investments and Surabaya Hospitals Investment - both wholly owned subsidiaries of Perpetual (Asia), a trustee of First Reit.

Primerich Investments and Surabaya Hospitals Investment have entered into a conditional sale and purchase agreement with Siloam International Hospitals and Megapratama Karya Bersama.

The manager said an extraordinary general meeting will be convened to seek unitholder approval for the proposed divestment. The manager has appointed Stirling Coleman Capital as independent financial adviser.