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First REIT Eyes Rental Rebates For Affected Tenants

First REIT Eyes Rental Rebates For Affected Tenants

May 20, 2020 — First REIT is looking at the possibility of issuing rental rebates for all its tenants affected by temporary closures due to the coronavirus disease (COVID-19) pandemic.

“For the properties affected by temporary closures, the Manager is in touch with the affected Tenants where the possibility of rental rebates is being considered and assessed. Retail and hospitality assets affected by the temporary closures comprise a small proportion of assets within First REIT’s portfolio, which is predominantly healthcare and/or healthcare-related,” the REIT said in response to questions by unitholders.

“The corresponding rental rebates, where applicable, are not expected to have material implications to the Trust,” it added.

All of First REIT’s healthcare properties, the 15 hospitals in Indonesia, 3 nursing homes in Singapore and 1 rehabilitation hospital in South Korea remain operational during this period, mostly with higher occupancy numbers.

Amongst the two retail assets of First REIT that are integrated with hospitals, (1) Lippo Plaza Kupang (“LPK”) was temporarily closed from end March to 26 May, apart from essential services, while (2) Lippo Plaza Buton (“LPB”) was temporarily closed from end March but has since resumed its operations in phases since early May 2020, with health and safety measures in place. LPK is part of the integrated development comprising Siloam Hospitals Kupang & LPK, while LPB is part of the integrated development comprising Siloam Hospitals Buton & LPB.

Additionally, two hospitality assets of First REIT have temporarily closed some or all of their facilities until further notice in support of the Indonesian Government’s efforts to contain the spread of COVID-19, namely
. (i)  Hotel Aryaduta Manado (“HAMD”), as part of the Manado Property that is integrated with Siloam Hospitals Manado (“SHMD”), where HAMD is temporarily closed while SHMD remains fully operational; and
. (ii)  Imperial Aryaduta Hotel & Country Club comprising an integrated hotel, Aryaduta Lippo Village(“ALV”), and a country club, Aryaduta Country Club (“ACC”), which has closed its country club services until further notice, in alignment with government’s efforts, while ALV remains fully operational. ALV’s occupancy rates are currently supported by corporate tie-ups.

“These are unprecedented times where all sectors have been impacted, the Manager has taken a prudent approach to conserve cash and initiate stringent cost management strategies to navigate these uncertain times. As the situation remains uncertain, it is currently difficult for the Manager to ascertain the full financial impact of the outbreak on the financial performance of First REIT,” the REIT said. “Nevertheless, First REIT remains in compliance of its debt financial covenants and has adequate financial reserves to fulfil its obligations in the foreseeable future. The Manager will continue to monitor the situation closely across Indonesia, Singapore and South Korea, and will provide updates on any material developments as soon as practicable.”

Read more here

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