First REIT to divest Sarang Hospital, exiting South Korea

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First REIT will divest its Sarang Hospital property, located in Yeosu City, South Korea, to unrelated parties Kiju Co. and Jemin Co. for US$4.52 million, around 1.7 percent below the valuation, the Singapore-listed REIT said in a filing to SGX Monday.

The property, which is the REIT’s only property in South Korea, is a six-storey hospital with one basement level and it is among Yeosu City’s largest rehabilitation treatment and nursing healthcare facilities in Yeosu City, the filing said.

The hospital was valued at US$4.6 million at the beginning of June by Colliers International (Hong Kong), the filing said, adding the valuation had been marked down to US$3.1 million in January.

The divestment is expected to yield net proceeds of around US$4.3 million, which may be used to fund potential acquisition opportunities, repay existing indebtedness and/or fund general corporate and working capital needs, First REIT said.

Under the deal, the REIT’s indirect wholly owned subsidiary Kalmore (Korea) will sell the property to Kiju, and then the REIT’s direct wholly owned subsidiary Kalmore Investments will sell all of the shares of Kalmore (Korea) to Jemin, the filing said.