First REIT – SGX

First REIT’s 2Q07 distributable income up 3.8% to $4.5M as healthcare portfolio grows

 Maiden contribution from three recently acquired nursing homes
 2Q07 DPU of 1.65 Singapore cents represents an annualised distribution yield of 8.19%
 Successfully completes fourth acquisition this year – Adam Road Hospital

SINGAPORE – 23 July 2007 – Bowsprit Capital Corporation (the “Manager”), the manager of First Real Estate Investment Trust (“First REIT”), Singapore’s first healthcare real estate investment trust, today announced that First REIT’s distributable income of S$4.5 million for the second quarter of FY2007 ended 30 June 2007 exceeded forecast by 3.8%.

At the same time, First REIT is also pleased to announce that it has successfully completed the acquisition of Adam Road Hospital for a purchase consideration of S$14.9 million. This represents First REIT’s fourth completed acquisition since its listing in December 2006 and clearly demonstrates its commitment to expand its asset portfolio and strengthen property income.

In the second quarter of FY2007, First REIT’s net property income rose 8.6% to S$6.5 million as maiden contributions from its three recently-acquired nursing homes in Lengkok, Senja and Lentor kicked in. Both the Lengkok and Senja nursing homes were acquired on 11 April 2007, while the acquisition of Lentor nursing home was completed on 8 June 2007.

First REIT’s distribution per Unit (“DPU”) for the second quarter was 3.8% higher than forecast, amounting to 1.65 Singapore cents, representing an annualised yield of 8.19% based on the closing price of S$0.805 per Unit on 20 July 2007.

The Books Closure and Distribution Payment dates are 1 August 2007 and 29 August 2007 respectively.

Commenting on First REIT’s results, Dr Ronnie Tan, Bowsprit’s CEO said, “We believe that our yield of 8.19% continues to be one of the highest among Singapore REITs. With a clear focus in Asia’s booming healthcare sector, First REIT offers investors a unique and growing asset class which holds immense potential for yield and capital growth. We are well on an aggressive acquisition trail and the Management is confident of raising our asset portfolio to S$500 million before 2009.”

Indeed, since its listing in December 2006, First REIT has expanded its asset base by about 20%. It currently has eight healthcare assets totalling S$308.0 million, compared with four assets at S$257.0 million at IPO last year.

Capital Management
To fund its acquisitions, First REIT has in place a clear financing structure with a S$90 million term loan facility with the Oversea-Chinese Banking Corporation. S$51 million of the proceeds have been utilised to date for First REIT’s acquisitions. Including the latest acquisition of Adam Road Hospital, First REIT’s gearing stands at 16.5%.

“Compared with other REITs, our gearing is still relatively low and this gives us headroom to undertake more accretive acquisitions. We are currently in active negotiation with a number of vendors in the region, which we hope will lead to a few additional acquisitions soon,” added Dr Tan

Potential Acquisitions
Besides acquiring assets from other vendors in the region, First REIT is also exploring potential acquisitions with its Sponsor, Lippo Karawaci.

Potential pipeline includes Siloam Hospitals Lippo Cikarang, and a 29-storey, 210-bed specialist hospital, called Siloam Hospital Semanggi, which will house Indonesia’s first private cancer treatment centre with state-of-the-art equipment – the Mochtar Riady Comprehensive Cancer Centre (“MRCCC”). Collectively known as the “Building of Hope”, Siloam Hospital Semanggi and MRCCC is expected to be completed and operational by December 2008.

In addition, according to Lippo Karawaci, expansion plans are underway at Siloam Hospitals West Jakarta and Siloam Hospitals Surabaya. When completed, First REIT has the option of acquiring the expanded real estate under terms of the Master Lease agreement.

“First REIT has the benefit of a regional reputable sponsor that is committed to expanding its healthcare business. With the first right of refusal under terms of the Master Lease agreement, Lippo Karawaci’s growing healthcare facilities form a solid pipeline of potential acquisitions for us, while we continue to explore other acquisition targets in the region,” added Dr Tan.

Barring unforeseen circumstances, First REIT is confident of delivering on its 2007 forecast distribution of 6.51 cents.