First REIT: Complete exit from Indonesia to de-risk portfolio

REITs

By Gerald Wong, CFA • 07 Apr 2026

Why trust Beansprout? We're licensed by the Monetary Authority of Singapore (MAS).

First REIT announced it will divest the portfolio of Indonesian healthcare assets to its existing tenant, Siloam International Hospitals, in two tranches. The full exit aligns unitholders' interest with waived management fee and special distribution.

In this article

What happened?

On 1 April 2026, First REIT announced that it has entered into an agreement to divest the entire portfolio of Indonesian healthcare assets to its existing tenant, Siloam International Hospitals, in two tranches. Siloam is the sole and current tenant of these assets, under a master lease agreement with First REIT.

The divestment comprises 8 hospitals and 3 non-core assets for a total consideration of approximately S$471.5 million, at a 2.1% premium to valuation. The non-core assets are being sold at slight discounts to valuation. The 2.8% premium on hospital assets, while positive, is modest.

1st tranche:

To divest eight hospital assets and three non-hospital assets for approximately S$471.5 million. This transaction value represents 2.1% premium over the latest independent valuations.
Upon completion, First REIT will also receive the rental arrears from MPU (PT Metropolis Propertindo Utama), of approximately S$6.9 million.

2nd tranche:

First REIT will be granted a put option, by Siloam, to sell the remaining six hospital assets, at approximately S$294.8 million, based on the latest valuation.
The put option, expiring on 31 October 2026, will be subjected to stated conditions.

First REIT - Overview of transaction — **Note:** 1)For illustrative purposes, certain Indonesia rupiah (“**IDR**”) amounts have been translated into Singapore dollars (“**SGD**” or “S$”). Unless otherwise indicated, such translations are as at 27 March 2026, being the latest practicable date prior to the Announcement (the “**Latest Practicable Date**”), and have been made based on the illustrative exchange rate of S$1.00 = IDR13,157.89. Such translations should not be construed as representations that Indonesia rupiah amounts referred to could have been, or could be, converted into Singapore dollars, as the case may be, at that or any other rate or at all. Any discrepancies in the tables, graphs and charts included in this presentation between the listed amounts and totals thereof are due to rounding.2)Premium calculated over the average of the two independent valuations commissioned by the Trustee and the Manager.3)The rents under the MPU master lease agreements are payable quarterly in advance. As at 31 December 2025, the rents outstanding from MPU amounted to approximately S$6.9 million (any discrepancy is due to rounding difference), comprising approximately S$3.3 million and approximately S$3.5 million for the mall and hospital components respectively. In January 2026, the Manager had received approximately S$1.5 million of subsequent receipts in repayment for the outstanding rentals from MPU. Please see First REIT’s press release for the financial year ended 31 December 2025 dated 5 February 2026 for further details.4)The Put Option exercise period commences on the date of the Put Option Agreements and ends on 31 October 2026, or (i) 31 December 2026, at the option of the parties following mutual discussions, or (ii) such other date as may be mutually agreed in writing between the parties.

*Source: Company data*

Divesting Indonesia portfolio to Siloam across two tranches

To recap, in January 2025, First REIT received a non-binding letter of intent from PT Siloam International Hospitals TbK to acquire the REIT’s portfolio of hospital assets in Indonesia.

Following which, First REIT conduct a strategic review. The strategic review aims to deliver sustainable long-term value to unitholders.

According to the announcement on 1 April 2026, after a rigorous process to assess all the strategic options, the divestment is confirmed.

The proposed divestment involves selling all the properties in Indonesia. As at 31 December 2025, First REIT has a portfolio of 31 properties with a total asset value of S$1.02 billion. These include 14 properties in Indonesia, 3 nursing homes in Singapore and 14 nursing homes in Japan.

Properties in Indonesia are a significant contributor to First REIT’s portfolio. In FY2025, the Indonesia segment accounts for 82.5% of rental income and 74.5% of assets under management.

The 14 properties in Indonesia comprises 11 hospitals, two integrated hospitals and malls and one integrated hospital and hotel.

First REIT - Indonesia accounts for 82.5% of rental income — *Source: Annual report FY2025*

First REIT - Indonesia accounts for 74.5% of Asset under management — *Source: Annual report FY2025*

Transaction provides cash inflows for debt repayment and special distribution to unitholders

The total sales proceeds from the 1st tranche is estimated at S$471.5 million. Following the divestment, First REIT will use the majority of the sales proceeds for debt repayment. Meanwhile, it will be looking for to reconstitute the portfolio by investing in developed countries.

The 2nd tranche, upon the exercise of the put option, is expected to bring in sales proceeds of S$294.8 million. The amount will be finalised based on a fresh independent valuation when the put option is exercised.

Part of the sales proceeds, equivalent to the premium over the valuation, estimated at S$9.7 million will be distributed to unitholders as special distribution. The proposed special distribution is expected to be declared over two financial quarters following the completion of the 1st tranche.

The proposed special distribution works out to only 0.46 cents per unit. This amount will not be able to compensate the unitholders for the loss of rental income after the sale. In our view, First REIT will need to fill the rental income gap within six months of 1st tranche’s completion in order to minimize the impact on unitholder returns.

First REIT - Proposed special distribution — **Note:** 1) This is computed based on the difference of approximately IDR0.13 trillion between the sum of the aggregate Hospital Divestment Consideration and the aggregate Non-Core Divestment Consideration (being approximately S$471.5 million), and the aggregate average of the two independent valuations of the Indonesia Divestment Properties by the Independent Valuers (being approximately S$461.8 million), based on an illustrative exchange rate of S$1.00 = IDR13,157.89. 2) Based on the price of S$0.25 per Unit as at the Latest Practicable Date.

*Source: Company data*

Derisks portfolio and redeploy capital into developed markets

To remove currency volatility and earnings drag from IDR/SGD exposure

The most fundamental driver is removing the persistent IDR/SGD foreign exchange headwind. Following the 2021 master lease restructuring, rental income from the Indonesian hospitals converted from SGD to IDR. Despite built-in 4.5% annual rent escalations and stable underlying asset performance in local currency terms, the sustained depreciation of the rupiah against the Singapore dollar has eroded DPU by 16.9% over five years from FY2021.

First REIT - Eliminate exposure to IDR SGD currency volatility and income drag — Note: 1) IDR/SGD rates from FactSet.
2) Excluding FRS 116 adjustment on rental straight-lining and includes revenue from Siloam Hospitals Surabaya that was divested in September 2022 and Imperial Aryaduta Hotel & Country Club that was divested in December 2025.
3) In February 2021, First REIT completed the issuance of 791,062,223 rights units.

*Source: Company data*

To reduce risk exposure to Indonesia

Amidst the uncertainty and reduced predictability in policymaking, the credit agencies have revised the outlook of Indonesia’s sovereign risk rating to Negative in 1Q 2026. First REIT’s full exit from Indonesia will remove the risk exposure and provides opportunity to deploy the capital into developed markets.

To optimize the capital structure

The transaction presents an opportunity for First REIT to strengthen the balance sheet. The proceeds will be used for debt repayment and to meet working capital requirements. Upon the debt repayment, pro-forma gearing fell to 16.7%, from 42.1% as at 31 December 2025. First REIT will also benefit from annual interest cost savings of S$18.8 million.

To reconstitute the portfolio and prioritise for growth in developed markets

With ample debt headroom, First REIT plans to deploy capital into the developed markets. Developed markets are attractive due to the lower cost of debt, enhanced currency stability, robust governance, and policy frameworks, amongst others.

To align interest with unitholders and proposed special distribution

To align with unitholders’ interest, the REIT manager will waive the divestment fee of S$2.4 million. In addition, unitholders will receive special distribution of S$9.7 million. On a proforma basis, this will lift the FY2025 DPU from 1.56 cents to 2.02 cents, representing proforma FY2025 DPU yield of 8.08%.

Tranche 1 sharply reduces leverage and interest expenses

On the proposed divestment of 1st Tranche, the total consideration of S$471.5 million will mainly go to debt repayment. Around S$362.7 million will go toward repaying secured loan facilities and debt securities (CGIF Bonds, Standby Letter of Credit, and the S$300 million facility).

This has a significantly positive impact on the balance sheet. Aggregate leverage falls from 42.1% to 16.7%, with total debt reducing from S$454.8 million to about S$110.0 million. This also delivers pro forma annual interest cost savings of S$18.8 million.

NAV per unit would decrease modestly from 24.97 cents to 23.43 cents.

The improvement in financial flexibility will benefit unitholders when First REIT acquires accretive assets that provides more stable distribution.

First REIT - Proforma financial effects — **Note:** 1) Based on the FY2025 Audited Consolidated Financial Statements and the price of S$0.25 per Unit as at the Latest Practicable Date.2)The Units in issue and to be issued do not include the 4,419,732 Units issued from 1 January 2026 to 31 March 2026, being the market day preceding the date of the Announcement.3)Assumes the average and closing exchange rates for IDR/SGD used for translating the FY2025 income statement and the financial positions as at 31 December 2025 are 12,346 and 12,987, respectively.4)Assumes the accounting policies and methods of computation applied to the pro forma financials are consistent with those applied in the FY2025 Audited Consolidated Financial Statements and the accounting standards applicable as at the date of the Announcement.5)Assumes the volume weighted average price for the management fee in Units is S$0.25 and the management fee payable in Units is 50%.6)Assumes the net proceeds from the Proposed Hospital Divestments will be used for the repayment of certain loan facilities and debt securities in respect of the Hospital Properties, being the CGIF Bonds, the Standby Letter of Credit, and the S$300 million Facility (see paragraph 2.3(i)(a)(III) of the Announcement for further details).7)Assumes Special Distribution of S$9.7 million from the surplus of the aggregate net proceeds from the Proposed Divestments. This is computed based on the difference of approximately IDR0.13 trillion between the sum of the aggregate Hospital Divestment Consideration and the aggregate Non-Core Divestment Consideration (being approximately S$471.5 million), and the aggregate average of the two independent valuations of the Indonesia Divestment Properties by the Independent Valuers (being approximately S$461.8 million), based on an illustrative exchange rate of S$1.00 = IDR13,157.89.

*Source: Company data*

Shareholder approval required at EGM

This proposed transaction constitutes an Interested Person Transaction (IPT) as the acquirer – Siloam and LK, are connected to Dr Stephen Riady and Dr James Tjahaja Riady, who are each deemed interested in approximately 45.72% of First REIT's units and are Controlling Unitholders.

Further, the proposed transaction is classified as “major transactions,” exceeding 50% of First REIT’s NAV and net property income.

This proposed transaction is an IPT and a major transaction which requires Unitholders’ approval at the EGM. The circular will be dispatched in May 2026 and it will contain a more detailed independent assessment by the independent financial advisor.

The estimated timeline for the completion of the proposed divestments is August 2026.

First REIT - Estimated timeline — *Source: Company data*

Maintain NEUTRAL

Following the exit from Indonesia, First REIT has substantial financial flexibility for acquisitions in more stable developed markets.

While the near-term DPU impact is significant — even with the Special Distribution, pro forma DPU drops from 2.17 cents to 2.02 cents (assuming half-year completion). Without new acquisitions, the remaining Singapore and Japan portfolio generates considerably less income. There is execution risk on the portfolio reconstitution — the Manager needs to find and close accretive acquisitions in competitive developed markets like Singapore, Japan, and Australia, which is not guaranteed. As such, we maintain our Neutral stance.

Important Disclosures

Analyst Certification and Disclosures

The analyst(s) named in this report certifies that (i) all views expressed in this report accurately reflect the personal views of the analyst(s) with regard to any and all of the subject securities and companies mentioned in this report and (ii) no part of the compensation of the analyst(s) was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst herein. The analyst(s) named in this report (or their associates) does not have a financial interest in the corporation(s) mentioned in this report.

An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst.

Company Disclosure

Global Wealth Technology Pte Ltd (“Beansprout”) does not have any financial interest in the corporation(s) mentioned in this report.

Disclaimer

This report is provided by Beansprout for the use of intended recipients only and may not be reproduced, in whole or in part, or delivered or transmitted to any other person without our prior written consent. By accepting this report, the recipient agrees to be bound by the terms and limitations set out herein.

You acknowledge that this document is provided for general information purposes only. Nothing in this document shall be construed as a recommendation to purchase, sell, or hold any security or other investment, or to pursue any investment style or strategy. Nothing in this document shall be construed as advice that purports to be tailored to your needs or the needs of any person or company receiving the advice. The information in this document is intended for general circulation only and does not constitute investment advice. Nothing in this document is published with regard to the specific investment objectives, financial situation and particular needs of any person who may receive the information.

Nothing in this document shall be construed as, or form part of, any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities. The data and information made available in this document are of a general nature and do not purport, and shall not in any way be deemed, to constitute an offer or provision of any professional or expert advice, including without limitation any financial, investment, legal, accounting or tax advice, and shall not be relied upon by you in that regard. You should at all times consult a qualified expert or professional adviser to obtain advice and independent verification of the information and data contained herein before acting on it. Any financial or investment information in this document are intended to be for your general information only. You should not rely upon such information in making any particular investment or other decision which should only be made after consulting with a fully qualified financial adviser. Such information do not nor are they intended to constitute any form of financial or investment advice, opinion or recommendation about any investment product, or any inducement or invitation relating to any of the products listed or referred to. Any arrangement made between you and a third party named on or linked to from these pages is at your sole risk and responsibility.

You acknowledge that Beansprout is under no obligation to exercise editorial control over, and to review, edit or amend any data, information, materials or contents of any content in this document. You agree that all statements, offers, information, opinions, materials, content in this document should be used, accepted and relied upon only with care and discretion and at your own risk, and Beansprout shall not be responsible for any loss, damage or liability incurred by you arising from such use or reliance.

This document (including all information and materials contained in this document) is provided “as is”. Although the material in this document is based upon information that Beansprout considers reliable and endeavours to keep current, Beansprout does not assure that this material is accurate, current or complete and is not providing any warranties or representations regarding the material contained in this document. All opinions contained herein constitute the views of the analyst(s) named in this report, they are subject to change without notice and are not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this report. Any reference to past performance should not be taken as an indication of future performance. To the fullest extent permissible pursuant to applicable law, Beansprout disclaims all warranties and/or representations of any kind with regard to this document, including but not limited to any implied warranties of merchantability, non-infringement of third-party rights, or fitness for a particular purpose.

Beansprout does not warrant, either expressly or impliedly, the accuracy or completeness of the information, text, graphics, links or other items contained in this document. Neither Beansprout nor any of its affiliates, directors, employees or other representatives will be liable for any damages, losses or liabilities of any kind arising out of or in connection with the use of this document. To the best of Beansprout’s knowledge, this document does not contain and is not based on any non-public, material information. The information in this document is not intended for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would be contrary to law or regulation, or which would subject Beansprout to any registration requirement within such jurisdiction or country. Beansprout is not licensed or regulated by any authority in any jurisdiction or country to provide the information in this document.

As a condition of your use of this document, you agree to indemnify, defend and hold harmless Beansprout and its affiliates, and their respective officers, directors, employees, members, managing members, managers, agents, representatives, successors and assigns from and against any and all actions, causes of action, claims, charges, cost, demands, expenses and damages (including attorneys’ fees and expenses), losses and liabilities or other expenses of any kind that arise directly or indirectly out of or from, arising out of or in connection with violation of these terms, use of this document, violation of the rights of any third party, acts, omissions or negligence of third parties, their directors, employees or agents. To the extent permitted by law, Beansprout shall not be liable to you, any other person, or organization, for any direct, indirect, special, punitive, exemplary, incidental or consequential damages, whether in contract, tort (including negligence), or otherwise, arising in any way from, or in connection with, the use of this document and/or its content. This includes, without limitation, liability for any act or omission in reliance on the information in this document. Beansprout expressly disclaims and excludes all warranties, conditions, representations and terms not expressly set out in this User Agreement, whether express, implied or statutory, with regard to this document and its content, including any implied warranties or representations about the accuracy or completeness of this document and the content, suitability and general availability, or whether it is free from error.

If these terms or any part of them is understood to be illegal, invalid or otherwise unenforceable under the laws of any state or country in which these terms are intended to be effective, then to the extent that they are illegal, invalid or unenforceable, they shall in that state or country be treated as severed and deleted from these terms and the remaining terms shall survive and remain fully intact and in effect and will continue to be binding and enforceable in that state or country.

These terms, as well as any claims arising from or related thereto, are governed by the laws of Singapore without reference to the principles of conflicts of laws thereof. You agree to submit to the personal and exclusive jurisdiction of the courts of Singapore with respect to all disputes arising out of or related to this Agreement. Beansprout and you each hereby irrevocably consent to the jurisdiction of such courts, and each Party hereby waives any claim or defence that such forum is not convenient or proper.