Singapore healthcare real estate investment trust First REIT is pursuing the portfolio of Healthscope properties that were purchased by Medical Properties Trust in 2019 for $1.2bn.
First REIT describes itself as a Singapore-based real estate investment trust that invests in income-producing real estate or related assets in Asia that are used for healthcare and related purposes.
It had a portfolio of $1.4bn of assets as of last year, including 12 hospitals in Indonesia and nursing homes in Singapore and Japan.
First REIT is managed by OUE, a Singaporean real estate development and investment management company with assets across various property sectors valued at close to $10bn.
Medical Properties Trust is selling the assets through investment bank Goldman Sachs, and first-round bids were due on October 31.
DataRoom understands that other bidders that put in a first round offer include David Di Pilla’s Home Consortium and Dexus Property.
The challenge for the buyers is gaining decent returns.
Medical Properties is understood to be hoping to achieve a price that equates to a yield of between 5 and 6 per cent, but annual rent increases have been set at 2.55 per cent per annum rather than tracking inflation, and there are concerns surrounding high debt levels for Healthscope.
Other logical suitors for the stable of about 12 properties are Centuria, Charter Hall and Australian Unity.
Singapore investors remain awash with cash and Australia has always been seen as an attractive investment destination.
Healthscope is the country’s second-largest private hospital operator.
It was bought by Canadian private equity firm Brookfield for $4.4bn in 2019, but MPT then purchased about half of Healthscope’s real estate portfolio from Brookfield, while NorthWest Healthcare Properties REIT acquired the remainder for $1.3bn.
It is understood that at the time of the sale, the portfolio was divided evenly between NorthWest and Medical Properties, with each group alternately selecting assets.
Medical Properties Trust is listed in the US and invests in real estate globally. It has $US9.5bn of net debt and $US19bn of assets.
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