First Reit

First Reit announced yesterday that it will add a $12.8 million nursing home to its portfolio.

The Lentor Residence - a 148-bed home with a gross floor area of almost 3,000 sq m - is the third nursing home in Singapore that the real estate investment trust (Reit) has bought since it was listed by Indonesia’s Lippo Group last December.

The deal will expand First Reit’s asset base by 14 per cent. It is also expected to reap $998,400 in annual rent from its lease of the Lentor Avenue nursing home to First Lentor Residences.

‘Not only will this acquisition further strengthen our income stream, it will also enlarge First Reit’s asset portfolio, raising it to $293.1 million,’ said Dr Ronnie Tan, chief executive officer of Bowsprit Capital Corporation, which manages First Reit.

First Reit, which is Singapore’s first health-care Reit, also owns a hospital and four properties in Indonesia.

Its new acquisition will be funded fully by a $90 million term loan from OCBC Bank issued in January this year.

‘Our gearing after the acquisition will still be relatively low, giving us financial flexibility to undertake more acquisitions that fit in with our strategy,’ said Dr Tan.

The firm aims to grow its asset base to $500 million within three years of its initial listing, but Singapore may not be the next destination.

Dr Tan said: ‘We will continue to look for quality health-care assets in different parts of Asia so as to reduce our reliance on any single country or type of tenants.’

Source: The Straits Times, 02 June 2007