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Indonesia healthcare boom to support yields at First REIT

Michelle Teo
Michelle Teo12/18/2017 08:00 AM GMT+08  • 4 min read
Indonesia healthcare boom to support yields at First REIT
SINGAPORE (Dec 18): Urbanisation, rising affluence and ageing populations are creating a healthcare boom in Asia. And, among the fastest-growing healthcare markets in the region is Indonesia. According to market research firm Frost & Sullivan, healthcare
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SINGAPORE (Dec 18): Urbanisation, rising affluence and ageing populations are creating a healthcare boom in Asia. And, among the fastest-growing healthcare markets in the region is Indonesia. According to market research firm Frost & Sullivan, healthcare expenditure in the country will rise to US$50.8 billion ($68.7 billion) by 2020. To put that into perspective, healthcare expenditure in Indonesia was US$26.9 billion in 2012, and only US$13.6 billion a decade ago.

One locally listed real estate investment trust that had benefited from this burgeoning market is First REIT. As its name suggests, it was the first healthcare REIT to be listed on the Singapore Exchange, back in 2006. Since its IPO, it has delivered a total annualised return of 21%. At present, First REIT boasts a portfolio that includes 15 hospital properties in Indonesia, some of which are integrated with malls and hotels. More than 95% of First REIT’s total rental income comes from these properties. It also holds three nursing homes in Singapore, and a rehabilitative and nursing facility in South Korea. In total, the trust has more than 4,700 beds, and its properties have a weighted average lease expiry of 10 years.

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