(Constituted in the Republic of Singapore pursuant to A trust deed dated 19 October 2006)

ANNOUNCEMENT PROPOSED JOINT ACQUISITION

Unless otherwise indicated in this announcement, all conversions from Rupiah amounts into

Singapore Dollar amounts in this announcement are based on an illustrative exchange rate of S$1.00 to Rp.9,800.

  1. INTRODUCTION

    Bowsprit Capital Corporation Limited, in its capacity as manager of First Real Estate Investment Trust ("First REIT" and as manager of First REIT, the "Manager"), is pleased to announce that First REIT, through a wholly-owned Singapore-incorporated subsidiary, has entered into a joint venture with Lippo Malls Indonesia Retail Trust ("LMIR Trust"), through its wholly-owned Singapore-incorporated subsidiary, in connection with the joint acquisition of an integrated development, comprising a hospital component known as "Siloam Hospitals Yogyakarta" ("SHYG") and a retail mall component known as "Lippo Plaza Jogja" ("LPJ", together with SHYG, the "Property", and the acquisition of the Property, the "Joint Acquisition"), located at Demangan Subdistrict, Gondokusuman

    District, Yogyakarta 1 , with postal address Jalan Laksda Adi Sucipto No. 32 - 34,

    Yogyakarta. The Joint Acquisition and the joint venture with LMIR Trust in connection with the Joint Acquisition pursuant to which First REIT will have exposure to all the economic rights and obligations in respect of SHYG (including the SHYG Master Lease (as defined herein)) and LMIR Trust will have exposure to all the economic rights and obligations in respect of LPJ (including the LPJ Master Leases and the Related Tenancy Agreements) are collectively known as the "Yogyakarta Transaction".

    For purposes of the Yogyakarta Transaction:

    1. Icon1 Holdings Pte. Ltd. ("First REIT SingCo") is a wholly-owned Singapore- incorporated subsidiary of First REIT. First REIT SingCo has, on 13 October 2017 entered into a joint venture deed ("JV Deed") with Icon2 Investments Pte. Ltd. ("LMIR Trust SingCo"), which is a wholly-owned Singapore-incorporated subsidiary of LMIR Trust, for the purposes of governing the relationship between First REIT SingCo and LMIR Trust SingCo as shareholders of PT Yogya Central Terpadu ("Yogyakarta IndoCo"), a limited liability company incorporated in Indonesia. First REIT SingCo and LMIR Trust SingCo will each hold 100.0% of the

      Class A ordinary shares ("Class A Shares") and 100.0% of the Class B ordinary shares ("Class B Shares") in Yogyakarta IndoCo, respectively2. At or prior to

      1. Yogyakarta is also commonly referred to as "Yogya", "Jogjakarta" or "Jogja".

      2. The JV Deed is conditional upon obtaining the approval from the unitholders of First REIT ("First REIT Unitholders") and unitholders of LMIR Trust ("LMIR Trust Unitholders").

        completion of the Yogyakarta Transaction, the Class A Shares will comprise 31.70% of the total issued share capital of the Yogyakarta IndoCo and the Class B Shares will comprise 68.30% of the total issued share capital of the Yogyakarta IndoCo. The Class A Shares and Class B Shares represent the total issued share capital of Yogyakarta IndoCo. Please refer to paragraph 2.2 below for further details of the Class A Shares and Class B Shares.

      3. The Yogyakarta IndoCo has on 13 October 2017 entered into a conditional sale and purchase agreement with PT Mulia Citra Abadi (the "Vendor") pursuant to which the Yogyakarta IndoCo propose to acquire the Property from the Vendor (the "Property CSPA").

        The Yogyakarta Transaction is structured as set out above because the Manager understands that currently in Yogyakarta there are no regulations permitting the regional

        government of Yogyakarta to subdivide the Property and issue separate strata titles (Hak Milik Atas Satuan Rumah Susun certificate)3. Yogyakarta IndoCo will therefore hold the Property under one Right to Build" (Hak Guna Bangunan or "HGB") title certificate4 which will expire on 27 December 2043. Under the JV Deed, First REIT SingCo has agreed to indemnify LMIR Trust SingCo against any and all losses which LMIR Trust SingCo may suffer or incur which arises out of or in connection with SHYG while LMIR Trust SingCo

        has agreed to indemnify First REIT SingCo against any and all losses which First REIT SingCo may suffer or incur which arises out of or in connection with LPJ. The effect of the JV Deed and the holding of the Class A Shares and Class B Shares is that First REIT will have exposure to all the economic rights and obligations in respect of SHYG through its indirect interest in the Class A Shares, while LMIR Trust will have exposure to all the economic rights and obligations in respect of LPJ through its indirect interest in Class B Shares, as if they had each acquired SHYG and LPJ separately.

        The Vendor is a limited liability company incorporated in Indonesia and an indirect wholly- owned subsidiary of PT Lippo Karawaci Tbk, the sponsor of First REIT and LMIR Trust (the "Sponsor").

        The purchase consideration of the Property is Rp.834.6 billion (S$88.1 million)5 , 6 (the "Property Purchase Consideration") which comprises:

        1. the consideration attributable to SHYG of Rp.264.6 billion (S$27.0 million) (the "SHYG Purchase Consideration"); and

          1. In the event that the laws and regulations prevailing in Yogyakarta changes to allow strata titles, the Manager and the LMIR Trust Manager (as defined below) may consider subdividing the Property and having separate strata titles issued in respect of LPJ and SHYG.

          2. In Indonesia, a HGB title is the closest form of land title to the internationally recognised concept of "leasehold" title and under Indonesian Agrarian Law, the highest title which can be obtained by a company incorporated or located in Indonesia is a "Right to Build" or HGB title. HGB title certificates can only be obtained by an Indonesian citizen, or by a legal entity which is incorporated under Indonesian law and located in Indonesia including foreign capital investment companies. A holder of the HGB title has the right to erect, occupy and use buildings on the parcel of land and sell all or part of such parcel. A HGB title is granted for a maximum initial term of 30 years. By application to the relevant local land office upon the expiration of this initial term, a HGB title may be extended for an additional term not exceeding 20 years.

          3. The Purchase Consideration is inclusive of the applicable land and building acquisition expenses (Biaya Perolehan Hak Atas Tanah dan Bangunan) to be paid to the relevant tax office.

          4. Based on an illustrative rupiah exchange rate of S$1.00 to Rp.9,800 (the "Illustrative Rupiah Exchange Rate"). Unless otherwise stated, all conversions of Rp. amounts into S$ in this announcement shall be based on the Illustrative Rupiah Exchange Rate and all amounts in Rp. and S$ in this announcement shall, where such amount exceeds one million, be rounded to one decimal number.

          5. the consideration attributable to LPJ of Rp.570.0 billion (S$61.1 million) (the "LPJ Purchase Consideration").

            Further details in respect of the structure of the Yogyakarta Transaction are set out at paragraph 2 below.

            In connection with the Yogyakarta Transaction, it is proposed that Yogyakarta IndoCo (as the master lessor) will enter into a master lease agreement (the "SHYG Master Lease Agreement") with the Master Lessees (as defined herein) pursuant to which Yogyakarta IndoCo will lease SHYG for a lease term of 15 years, commencing from the date of completion of the SHYG Acquisition (as defined below) with an option to renew for a further term of 15 years exercisable by the master lessees (the "SHYG Master Lease").

            Further, in connection with the Yogyakarta Transaction, it is proposed that Yogyakarta IndoCo (as the master lessor) will enter into the following leases:

            1. a car park lease agreement with PT. Andhikarya Sukses Pratama (as the lessee of the car park space) ("PT ASP") (the "LPJ Car Park Lease Agreement");

            2. a casual leasing space lease agreement with PT. Manunggal Megah Serasi (as the lessee of the casual leasing space of LPJ) ("PT MMS") (the "LPJ Casual Leasing Space Lease Agreement"); and

            3. specialty tenants leases over the specialty areas (which includes the areas leased to the anchor tenant (Matahari Department Store) and specialty tenants (including food court, chiller area and rooftop area) with PT. Mulia Cipta Sarana Sukses (as the lessee of the specialty tenants lease of LPJ) ("PT MCSS") (the "LPJ Specialty Tenants Lease Agreements");

            4. (collectively, the "LPJ Master Lease Agreements").

              PT ASP, PT MMS and PT MCSS (collectively, the "LPJ Lessees") are limited liability companies incorporated in Indonesia and are indirect wholly-owned subsidiaries of the Sponsor.

            5. THE YOGYAKARTA TRANSACTION
              1. Description of the Property

                The Property, which is located at Jalan Laksda Adi Sucipto No. 32 - 34, Yogyakarta, comprises a 10-storey building (including one basement and one mezzanine level), which was originally built in 2005, erected on land with a total land area of 13,715 square metres ("sq m") as specified in Right-to-Build Certificate No. 00131/Demangan. It has a shared multi-storey vehicle parking area on the upper levels totalling 752 and 875 car and motorcycle lots, respectively, and a helipad on the roof.

                SHYG has a gross floor area ("GFA") of 12,474 sq m with a maximum capacity of 220 beds and commenced operations under the "Siloam Hospitals" brand in July 2017, with Centres of Excellence for Neuroscience and Cardiology. Physical construction and redevelopment works for SHYG were completed in 2015.

                LPJ has a GFA of 66,098 sq m (comprising 35,965 sq m for mall and 30,133 sq m for the parking area) with a diverse range of tenants including a cinema, food retailers and a

                hypermarket. LPJ underwent major refurbishment from 2013 to 2015 and recommenced operations in June 2015.

              2. Structure of the Yogyakarta Transaction

                First REIT and LMIR Trust are seeking to jointly acquire the Property for a total purchase consideration of Rp.834.6 billion (S$88.1 million) from the Vendor, which is an indirect wholly-owned subsidiary of the Sponsor.

                Pursuant to the JV Deed:

                1. the holder of the Class A Shares are entitled to, among others, all the economic rights of all the assets and undertakings relating to SHYG and all the rights to the revenue, profits and dividends attributable to SHYG. The holder of the Class A Shares is also responsible for all the liabilities, obligations, costs, expenses and losses attributable to SHYG, howsoever arising; and

                2. the holder of the Class B Shares are entitled to, among others, all the economic rights of all the assets and undertakings relating to LPJ and all the rights to the revenue, profits and dividends attributable to LPJ. The holder of the Class B Shares is also responsible for all the liabilities, obligations, costs, expenses and losses attributable to LPJ, howsoever arising.

                In addition, under the JV Deed, First REIT SingCo has agreed to indemnify LMIR Trust SingCo against any and all losses which LMIR Trust SingCo may suffer or incur which arises out of or in connection with SHYG while LMIR Trust SingCo has agreed to indemnify First REIT SingCo against any and all losses which First REIT SingCo may suffer or incur which arises out of or in connection with LPJ. The maximum aggregate liability of LMIRT SingCo to First REIT SingCo in respect of a claim under the JV Deed shall not exceed the reinstatement value of the hospital component based on the valuation of the hospital component in the latest audited financial statements of First REIT, while the maximum aggregate liability of First REIT SingCo to LMIRT SingCo in respect of a claim under the JV Deed shall not exceed the reinstatement value of the retail mall component based on the valuation of the retail mall component in the latest audited financial statements of LMIR Trust. Further, under the JV Deed, First REIT SingCo agrees and shall procure the First REIT Trustee to agree that any and all losses which LMIR Trust SingCo may suffer or incur which arises out of or in connection with SHYG shall be satisfied out of the assets of or held on trust for First REIT over which the First REIT Trustee has recourse while LMIR Trust SingCo agrees and shall procure the LMIR Trust Trustee to agree that any and all losses which First REIT SingCo may suffer or incur which arises out of or in connection with LPJ shall be satisfied out of the assets of or held on trust for LMIR Trust over which the LMIR Trust Trustee has recourse.

                The effect of the JV Deed and the holding of the Class A Shares and Class B Shares is that First REIT will have exposure to all the economic rights and obligations in respect of SHYG through its indirect interest in the Class A Shares, while LMIR Trust will have exposure to all the economic rights and obligations in respect of LPJ through its indirect interest in Class B Shares, as if they had each acquired SHYG and LPJ separately.

                The chart below sets out the structure under which the Property is proposed to be held by First REIT and LMIR Trust upon completion of the Yogyakarta Transaction.

              First Real Estate Investment Trust published this content on 13 October 2017 and is solely responsible for the information contained herein.
              Distributed by Public, unedited and unaltered, on 13 October 2017 15:24:07 UTC.

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