Singapore’s First REIT has confirmed that it received a preliminary, non-binding proposal from PT Siloam International Hospitals Tbk (Siloam) to acquire its portfolio of Indonesian hospital assets. The proposal, supported by CVC Capital Partners, signifies Siloam’s ambition to expand its footprint in Indonesia’s growing healthcare market.

Siloam, which is both the operator and tenant of the targeted assets, disclosed its intentions in a filing to the Indonesian stock exchange. While specific financial details of the proposal remain undisclosed, the move aligns with Siloam's strategy to strengthen its operations and enhance its asset ownership in Indonesia.

Strategic Review by First REIT

In response to the proposal, First REIT has initiated a comprehensive review to assess the feasibility and potential benefits of the acquisition. As Singapore’s first healthcare real estate investment trust, First REIT focuses on owning income-generating properties in Asia’s healthcare sector. The Indonesian portfolio under consideration plays a significant role in its current holdings.

The review will likely consider the deal’s impact on stakeholders, First REIT’s financial health, and the long-term outlook for its portfolio.

CVC Capital Partners' Role in Siloam’s Expansion

CVC Capital Partners, a private equity firm based in Luxembourg, has been instrumental in bolstering Siloam’s capabilities. In August 2024, CVC acquired a 45% stake in Siloam from Lippo Karawaci for $1 billion, further solidifying its support for Siloam’s strategic goals.

Siloam’s interest in First REIT’s hospital portfolio underscores its commitment to delivering quality healthcare services while navigating Indonesia’s growing demand for advanced medical facilities.

Impact on the Healthcare Sector

If successful, the acquisition could boost Siloam’s presence in Indonesia, providing an opportunity to streamline operations and improve patient care. For First REIT, the deal might offer financial flexibility to explore new investment opportunities or enhance returns for its stakeholders.

Additionally, this transaction reflects the increasing investor interest in Southeast Asia’s healthcare sector, driven by rising population growth and evolving healthcare needs.

Future Prospects

With the ongoing review by First REIT, the outcome of the proposal remains uncertain. However, the deal’s potential to reshape healthcare infrastructure in Indonesia is evident. Both parties stand to benefit significantly from the transaction, which could serve as a catalyst for further developments in the region’s healthcare landscape.

As Siloam continues to align with its business expansion plans, the proposed acquisition highlights the growing synergy between private equity and healthcare providers in driving industry transformation.