One of this year’s top performing REITs is First REIT, which was listed in 2006 with Indonesian healthcare assets — mainly hospitals. First REIT’s unit price is up some 40% this year. Most of the gains were recorded in November. On Dec 8, First REIT’s manager announced it plans to acquire 12 nursing homes from joint sponsor OUE Lippo Healthcare (OUELH) for JPY24.2 billion (around $290 million), a slight discount to the valuation of JPY25.2 billion.

To fund the purchase, First REIT is proposing a placement to OUELH at $0.305, a premium to its threemonth volume-weighted average price (VWAP) of $0.279. It is rare to have a placement at a premium to VWAP. In February this year, First REIT completed a dilutive rights issue, with rights units issued at 20 cents, and a theoretical ex-rights price or TERP of 31 cents. The purpose of the rights issue was to raise $158.2 million, to offset the shortfall in a debt refinancing structure caused by a sharp haircut in valuation.

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