HEATHCARE-BASED First Real Estate Investment Trust has agreed to acquire two new income-producing hospitals in Indonesia for $190.4 million in total.
First Reit will buy Siloam Hospitals Bali in the resort island city of Kuta, Bali for $97.3 million.
It will also acquire Siloam Hospitals TB Simatupang in South Jakarta $93.1 million.
Both properties belong to subsidiaries of Lippo Karawaci, the sponsor of First Reit.
The Kuta property will be financed entirely by a drawdown of committed debt facility while the Jakarta hospital will be financed by a combination of the debt facility and issuance of new units.
Based on the average of two independent valuations, the Bali and Jakarta hospitals are being acquired at a discount of 13.3 per cent and 12.5 per cent to their respective valuation.Based on annual initial rents of $9.7 million for the Bali hospital and $9.3 million for the Jakarta hospital, the properties will offer an initial net property yield in excess of 9 per cent.
These will boost net property income by $18.8 million and distribution per unit by 5.5 per cent to 6.94 cents for the year to Dec 31, assuming the properties were acquired on Jan 1, 2012.
The equivalent net asset value per unit would have increased by 8.4 per cent to 90 cents.