Business Development

First REIT intends to develop its business by investing directly or indirectly, in a single or portfolio of income-producing properties, which is primarily used for healthcare and healthcare-related purposes, whether wholly or partially.

What type of Properties do we invest in?
Which Countries are we focusing on?
What forms of real estate do we invest in?
What are the advantages to Vendors by selling their real estate to us and leasing back for their operations?
How to get in touch with us for a preliminary business discussion?

1.0 What type of Properties do we invest in?

The Managers of First REIT would like to engage with Property Owners or Owners' Representatives to work out mutually beneficial proposals so that Owners can securitise their real estate with First REIT and in turn realise cash.

A typical asset securitisation structure would be the "Sale and Leaseback Structure" and the types of properties that can be securitised are as follows :

1. General or specialist hospitals
   
2. Medical centres or medical office buildings or space
   
3. Wellness, therapy or clinical centres or space
   
4. Retail pharmacy space
   
5. Healthcare or medical institutional buildings or space
   
6. Nursing and therapy homes
   
7. Retirement homes and villages
   
8. Healthcare or medical tourism properties
   
9. Health-science industrials and manufacturing space
   
10. Medical technology or bio-tech R&D and laboratory space

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2.0 Which Countries are we focusing on?

The Managers of First REIT would like to invest in healthcare and healthcare related properties in these countries:

1. Indonesia
   
2. Singapore
   
3. Malaysia
   
4. Thailand
   
5. China, and
   
6. Hong Kong

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3.0 What forms of real estate do we invest in?

First REIT can invest in leasehold or freehold properties that are in these forms :

1. Completed buildings currently occupied by healthcare or healthcare related users
   
2. Buildings undergoing construction and to be occupied by healthcare or healthcare related users upon completion
   
3. Buildings planned for development for healthcare or healthcare related users

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4.0 What are the advantages to Vendors by selling their real estate to us and leasing back for their operations?

1. Enables Vendor to be asset light

   • Vendor sells property in cash and repays outstanding loan on property and overdrafts, if any, hence lowers financial risk and saves on interest expenses
   • Cash realised upfront and capital gains on property sale, may be tax free.
   • Possible future decline of Vendor's property value can be avoided, thus eliminating real estate pricing risk.
   • Cash can be recycled into Vendors' growing core business or reinvested in other high growth areas with higher Return on Equity (ROE) thus higher dividend and earnings for the Vendor.
   • With the property sale, building and land depreciation of the property in the Vendor's books can be avoided.
   • Vendor's excess funds (realised from sale) can also be returned to shareholders.
   • Excess space within the property can be sublet to other complementary tenants in order to increase rental income for the Vendor.

2. With a lease-back scheme, Vendor can continue to operate without disruption within the premises under a long term pre-negotiated Master Lease

   • Given the security of tenure, Vendor can operate on a long term basis as the Master Tenant.
   • Vendor need not sell away its profitable healthcare business.
   • Vendor can segregate the real estate value and the enterprise value of its healthcare business for a more efficient measurement of Return on Equity of their healthcare business.
   • Rental payments can be treated as expense item in the Profit & Loss Statements, thus tax deductible.
   • Master lease can incorporate special requirements of the Lessee, i.e. provision for future extension of space for the Master Lessee.

3. Other Benefits

   • Vendor can eliminate risk of exposure to the volatile property market and interest rate fluctuations in the future.
   • Shareholders of the Vendor's company may not be held as "personal guarantors" of the lease as compared to bank loans or mortgages

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5.0 How to get in touch with us for a preliminary business discussion?

If you own a healthcare or healthcare related property and wish to find out more about the "Sale and Leaseback Structure", please get in touch with us for further discussion.

Mr. Jacky Chan
Senior Asset & Investment Manager of First REIT
50 Collyer Quay
#06-01, OUE Bayfront
Singapore 049321

Tel : +65 64350168 (General) / +65 66346875 (Direct)
Fax : +65 64350167
Mobile : +65 96816553
Email : jchan@first-reit.com

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