First REIT

First REIT: OCBC maintains Hold with $0.98 TP. Note that REIT recently announced its proposal to acquire two Indonesian properties (one integrated hospital and hotel and the other a hospital) from its sponsor Lippo Karawaci for a total purchase consideration of $142.9m. This would be funded largely by debt and partly by a private placement exercise. While the lease structure was largely similar to its existing Indonesian asset portfolio and would continue to provide unitholders with stability and income visibility, there were some lease terms which house were disappointed with. Had previously assumed new acquisitions in model and hence finetune our assumptions in accordance to the updated details. Also roll forward valuations to FY13, although this is partially mitigated by an enlarged unit base from its impending private placement exercise. RNAV-derived fair value estimate increases from $0.96 to $0.98.