Nov 11, 2010

First Reit - my first healthcare reit

Just two days ago, First Reit announces that it is going to issue rights to fund the purchase of two hospitals in Indonesia. According to the announcement, it is going to issue rights at S$0.50 per unit and the TERP is estimated to be at S$0.70. It is also a yield accretive acquisition as the distribution yield is to rise from 8.57% to 9.14% (based its calculation on the closing price of S$0.95 on 4th Nov 2010).

All along, I have been interested to own some units of this reit and now it provides me a very good opportunity to do just that. Due to my capital limitation, I intend to own about 10000 shares (10 Lots) of it. After some calculation and consideration, I decided to do this :

1. Buy from open market = 4000 shares (4 Lots)
2. Rights to be received = (4000/4) * 5 = 5000 rights units
3. Shares own after rights conversion = 4000 + 5000 = 9000 shares
4. For the balanced shares :
  • To apply excess rights for at least = 1000 units => 1000 shares
  • Or, buy again from open market = 1000 shares

 Net shares to own = 9000 + 1000 = 10000 shares

So far, I have completed Step 1 today. Hence for now, I shall wait for the window of rights application to open and then proceed with my rights and excess rights application.

I will continue my update about this purchase in my later posts.


  1. Hi PassiveReturns,

    I got Parkway Life as my first healthcare REIT recently.

    I am also considering to enter First REIT after the rights issue when the price drops.

  2. Hi Dividends Warrior,

    Very glad to hear that you have PLife in your portfolio !! In fact, I intend to get some in my portfolio also. But for the time being, I will settle FR rights issue and gather enough "bullets" first, before I switch my attention to PLife, haha.

    Welcome to FR community whenever you are ready !! :=)

  3. Hi,

    would just like to share that it might be more prudent to diversify out of REITs and Trusts too. :)

  4. Hi JW, welcome to my little blog here. You are right and thank you for sharing your view. :=)

    I do have subsequent plan to diversify into Blue Chips too, let us see how it goes when the stock market corrects further.

  5. Judging by the Euro-zone debt crisis, opportunity for bargain hunting is near. :)

  6. D.W, agree with you, it looks like the tide is turning now, so hopefully we can pick up some good seashells !! :=)