First Reit to divest South Korean property for US$4.5 million

FIRST Real Estate Investment Trust (Reit) said on Monday its subsidiaries have entered into conditional sale and purchase agreements for Sarang Hospital for around US$4.52 million.

The property - which is First Reit's only property in South Korea - is a six-storey hospital with one basement level located in Yeosu City.

The total sale price for the divestment is approximately 1.7 per cent lower than the independent valuation of US$4.6 million as at last month. However, the Reit manager noted it had previously taken a prudent view to mark down the valuation of the property to US$3.1 million, based on potential upcoming capital expenditure costs.

The manager said it believes that the divestment will benefit unitholders of First Reit, as it is in line with its "proactive asset management strategy to optimise First Reit's portfolio and optimise returns for unitholders".

The net proceeds from the property divestment would be approximately US$4.3 million and may be used to fund potential acquisition opportunities, repay existing indebtedness and/or fund general corporate and working capital needs of First Reit.

First Reit units closed at 26 Singapore cents on Monday, down 1.9 per cent before the announcement.