Saturday, January 1, 2011

First Reit doubles assets to $612.8m

FRESH from its recent rights issue, First Reit has acquired two new health-care properties in Indonesia, its manager Bowsprit Capital Corporation said in an announcement to the Singapore Exchange (SGX) yesterday.


The health-care real estate investment trust (Reit) completed the acquisition of Mochtar Riady Comprehensive Cancer Centre on Thursday and that of Siloam Hospitals Lippo Cikarang yesterday, Bowsprit said.


With these two purchases, First Reit has almost doubled its assets under management to $612.8 million as of yesterday.


It has also increased the total gross floor area of its portfolio assets by nearly 60 per cent, from 900,274 sq ft previously to 1.43 million sq ft now. The total number of hospital beds in First Reit's Indonesia portfolio will also rise 44 per cent from 537 to 772, Bowsprit said.


'The two acquisitions were made possible because of our unitholders' overwhelming support for our recent rights issue,' said Mr Albert Saychuan Cheok, chairman of Bowsprit.


First Reit raised $167.3 million in net proceeds from its rights issue, of which $121.7 million was used to partly finance the acquisition of the Mochtar Riady Comprehensive Cancer Centre, Bowsprit said on Thursday. The rest of the acquisition was financed through a loan.


The Reit aims to grow its portfolio to $1 billion in the next two to three years, said Dr Ronnie Tan, Bowsprit's chief executive officer. 'With the completion of the acquisitions and rights issue, we now have a stronger balance sheet,' he added.


First Reit's gearing level is projected to be about 17 per cent for this year, 'significantly lower than the regulatory limit of 35 per cent'. This will give the Reit room for future acquisitions, Dr Tan said.


As a result of the larger portfolio, Bowsprit expects First Reit's annual gross rental income to rise about 80 per cent, from the $30.3 million projected for last year to $54.5 million this year.


On the same basis, distributable income is also expected to increase by 89 per cent, from $21.3 million to $40.3 million.

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