First REIT Issues Units to Manager as Divestment Fee for Imperial Aryaduta Hotel & Country Club Sale

Key Points from the Report

• Divestment Completed: First Real Estate Investment Trust (“First REIT”) has completed the divestment of the Imperial Aryaduta Hotel & Country Club through the sale of 100% of PT Karya Sentra Sejahtera, its wholly-owned subsidiary.
• Divestment Fee Paid in Units: As part of this transaction, First REIT Management Limited, the manager of First REIT, was paid a divestment fee amounting to S\$129,542.57, representing 0.5% of the agreed property value. The payment was made via the issuance of 465,478 new First REIT units at an issue price of S\$0.2783 per unit.
• Issue Price Determination: The issue price for the units was based on the volume weighted average price (VWAP) for all trades on the Singapore Exchange (SGX-ST) from 9 January 2026 to 22 January 2026, i.e., the 10 business days immediately preceding the issue date.
• Manager’s Increased Stake: With this issuance, the Manager now holds 231,654,222 units, or 10.97% of the total 2,111,434,940 units in issue.
• Regulatory Compliance: As the divestment was an Interested Party Transaction under Appendix 6 of the Code on Collective Investment Schemes, the divestment fee was paid in units, which cannot be sold by the Manager for at least one year from the date of issuance.

Key Information for Shareholders

• Potential Price Sensitivity: The completion of this divestment and the method of fee payment via unit issuance may be price sensitive as it affects the Manager’s stake and could impact market perceptions of alignment of interest between the Manager and unitholders.
• Potential Dilution: The issuance of 465,478 new units increases the overall unit base, resulting in slight dilution for existing unitholders.
• Lock-up Period: The newly issued units to the Manager cannot be sold for at least one year, reducing the risk of immediate market overhang from a large sale by the Manager.
• Strategic Shift: The divestment of a significant asset (Imperial Aryaduta Hotel & Country Club) could signal a strategic shift in the REIT’s portfolio, capital allocation, or asset composition, which may affect future income and distributions.
• Manager Alignment: The Manager’s increased stake to over 10% may signal increased alignment with unitholder interests, potentially viewed positively by investors.

Detailed Summary of Events

On 17 October 2025, First REIT announced its intention to divest the Imperial Aryaduta Hotel & Country Club via the sale of its wholly-owned subsidiary PT Karya Sentra Sejahtera. The divestment was completed on 4 December 2025. As per the terms, the Manager was entitled to a divestment fee of 0.5% of the agreed property value, amounting to S\$129,542.57. The divestment fee was settled through the issuance of 465,478 new First REIT units at S\$0.2783 per unit, determined by the VWAP over the 10 trading days prior to issuance.

Following the issuance, the Manager holds 231,654,222 units, representing 10.97% of the total issued units. Importantly, due to the transaction’s status as an Interested Party Transaction under the Monetary Authority of Singapore’s regulations, these new units are subject to a one-year lock-up and cannot be sold before January 2027.

Shareholders should note that while the issuance is relatively small compared to the total units (less than 0.03% dilution), the Manager’s increased stake and the lock-up provisions may have implications for both governance and future trading liquidity. The divestment of a significant property asset may also impact the REIT’s future earnings profile, portfolio composition, and distribution outlook.

Forward-Looking Statements

Investors should be aware that the value of units and income derived from them may fluctuate. This announcement contains forward-looking statements subject to risks and uncertainties, including economic and industry conditions, interest rate movements, and regulatory changes. Past performance does not guarantee future results. Investors are advised not to place undue reliance on these statements and to consider their own circumstances carefully.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors should perform their own due diligence and consult with a professional financial advisor before making any investment decisions. The issuer and reporter accept no liability for any losses incurred as a result of reliance on the information contained herein.

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