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First Reit's Indonesian tenant asks to restructure master lease agreements

Siloam Hospitals Kupang.JPG
First Reit's Indonesia portfolio includes Siloam Hospitals Kupang & Lippo Plaza Kupang.

Lippo Plaza.JPG
Siloam Hospitals Kupang & Lippo Plaza Kupang is a linked 4-storey hospital and a 3-storey mall in Kupang, Indonesia.

THE manager of First Real Estate Investment Trust (First Reit) on Thursday said it has received a request from its Indonesian tenant, Metropolis Propertindo Utama (MPU), to restructure existing master lease agreements. (see amendment note)

MPU has also asked for additional rental relief for the second half of the year, as well as flexibility in the payment of outstanding rents.

The master lease agreements were entered into with MPU and its subsidiary in respect of three properties from First Reit's Indonesia portfolio, namely Siloam Sriwijaya hospital, Siloam Hospitals Purwakarta and Siloam Hospitals Kupang & Lippo Plaza Kupang.

In a bourse filing on Thursday night, the manager said it will consider the request from MPU to restructure the agreements "carefully", with any agreement to be "mutually agreeable and beneficial in the long-term interest of First Reit and its unitholders". This is subject to all outstanding rents having been fully repaid to First Reit, the manager added.

Separately, the manager on Thursday also announced additional rental relief for all its tenants in Indonesia for the months of September and October, amounting to some S$18.9 million.

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While this has been extended to MPU, it is conditional upon MPU first settling all outstanding rents, failing which the full contracted rents under the MPU master lease agreements for those two months shall continue to be due and payable, the manager said.

Rents under the MPU master lease agreements are payable quarterly in advance.

As at Oct 22, rental arrears of about S$4.7 million are outstanding from MPU, after deducting the rental relief for the months of September and October, the manager said. This includes S$1.7 million of rental to be paid in advance for November and December, S$1.2 million which is less than or 30 days overdue, S$1.2 million which is between 31 and 60 days overdue, as well as S$0.6 million which is between 61 and 90 days overdue.

First Reit units were trading flat at 41.5 Singapore cents as at 10am on Friday.

Amendment note: An earlier version of this story incorrectly said that MPU is a subsidiary of First Reit. It is in fact a tenant of the Reit. 

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