First Real Estate Investment Trust : Responses To Questions From Unitholders And Link To Recording Of Virtual Information Session

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

RESPONSES TO SUBSTANTIAL AND RELEVANT QUESTIONS FROM UNITHOLDERS AND LINK TO RECORDING OF VIRTUAL INFORMATION SESSION

1. Background. The Board of Directors (the "Board") of First REIT Management Limited, in its capacity as manager of First Real Estate Investment Trust ("First REIT", and as manager of First REIT, the "Manager"), refers to:
2. 1. the circular to holders of units in First REIT ("Units", and holders of Units, "Unitholders") dated 30 June 2022 (the "Circular") in relation to the proposed divestment by Primerich Investments Pte. Ltd. and Surabaya Hospitals Investment Pte. Ltd. to PT Siloam International Hospitals Tbk ("Siloam") and PT Megapratama Karya Bersama of 100.0% of the issued and paid-up share capital of PT Tata Prima Indah ("PT TPI", and 100.0% of the issued and paid-up share capital of PT TPI, the "Sale Shares"), which owns a 100.0% interest in Siloam Hospitals Surabaya, for a divestment consideration of Rp.430.0 billion (approximately S$40.9 million 1 ) (subject to post-completion adjustments) (the "Proposed Divestment");
   2. the notice of extraordinary general meeting ("EGM") dated 30 June 2022 notifying Unitholders of the EGM to be convened and held by way of electronic means on Monday, 25 July 2022 at 2:30 p.m. (Singapore time); and
   3. the announcement released by the Manager on 30 June 2022 titled "Extraordinary General Meeting of Unitholders to be held on 25 July 2022" setting out, among others, the alternative arrangements which have been put in place to allow Unitholders to participate at the EGM.
3. Responses to substantial and relevant questions from Unitholders. The Manager would like to thank
   Unitholders for submitting their questions in advance of First REIT's EGM. The Manager would like to inform that a list of all substantial and relevant questions which have been received from Unitholders prior to the closing date and time for submission of questions and the management's and the Board's responses to these questions are set out in Annex Aof this announcement.
4. Recording of virtual information session. The Manager would also like to thank Unitholders for attending the virtual information session in relation to the Proposed Divestment on Wednesday, 13 July 2022 (the "Virtual Information Session"). Unitholders may access a recording of the Virtual Information Session at https://www.first-reit.com/ir_egm.html.

1. For illustrative purposes, certain Indonesia rupiah amounts have been translated into Singapore dollars. Unless otherwise indicated, such translations have been made based on the illustrative exchange rate of S$1.00 = Rp.10,526.

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By Order of the Board

Tan Kok Mian Victor

Executive Director and Chief Executive Officer First REIT Management Limited

(Company registration no. 200607070D)

As Manager of First Real Estate Investment Trust

18 July 2022

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ANNEX A

RESPONSES TO SUBSTANTIAL AND RELEVANT QUESTIONS FROM UNITHOLDERS

For further details on the Proposed Divestment, please refer to the Circular to Unitholders dated 30 June 2022 in relation to the Proposed Divestment. Capitalised terms used herein, unless otherwise defined, shall have the meanings ascribed to them in the Circular.

QuestionsResponses

Transaction overview

1. How will the divestment benefit shareholders?
2. What are the strategies related to this divestment?
3. What are the expected benefits and risks with this divestment?
4. What is the reason for proposed divestment, and what are material impact to First Reit unit holders?
5. What is the main purpose of this divestment?

The Proposed Divestment is in alignment with "First REIT 2.0 Growth Strategy" to reshape the portfolio of First REIT for capital efficient growth. It is an opportunity to recycle a mature asset that was constructed in 1977, instead of taking on excessive development risk arising from the Road Subsidence that took place in 2018. The Agreed Property Value of Rp.430.0 billion (approximately S$40.9 million) represents a 143.2%2 gross premium over First REIT's original purchase consideration of S$16.8 million.

Following further discussions with PT Lippo Karawaci Tbk ("LPKR"), the Manager understands that either LPKR or Siloam intend to continue the development works on the portion of the land adjacent to Siloam Hospitals Surabaya (the "Development Works Site"), a part of which First REIT had sold to PT Saputra Karya ("PT SK") in connection with the development works to develop a new hospital (the "Development Works") pursuant to a development works agreement entered into between PT TPI and PT SK on 20 October 2015 (the "Development Works Agreement") independently (the "New Development Works").

Assuming the completion of the New Development Works, Siloam will likely commence operations within the new healthcare facility, adjacent to the existing Siloam Hospitals Surabaya. The existing Siloam Hospitals Surabaya will therefore likely be vacated by the tenants of the existing Siloam Hospitals Surabaya, in favour of the new healthcare facility. On this basis, the Proposed Divestment is a prudent exit strategy and presents a holistic approach that resolves downstream complications.

Following the Proposed Divestment, the weighted average age of property ("WAAP")3 for the portfolio of First REIT will improve from

16.2 years to 15.7 years as at 31 December 2021 and on a pro forma basis, including the Japan Nursing Homes.

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The gross premium of 143.2% does not take into account the divestment by First REIT of 2,556 sq m for a consideration of S$8.2 million on 11 March 2016. Taking into account such divestment of 2,556 sq m for a consideration of S$8.2 million, the gross premium would be 192.0%.

WAAP is computed on a gross floor area basis.

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QuestionsResponses

6. Given that the sale price is at a Siloam Hospitals Surabaya is a mature asset that was constructed in

mere 0.1% premium to the	1977 and faced increasing competition from new facilities, as well as
valuation, has the manager	existing healthcare competitors with upgraded facilities.
searched and sourced for better	As announced previously, First REIT had sold a portion of the land
offers? If so, please elaborate
adjacent to Siloam Hospitals Surabaya to PT SK in connection with the
how many other (potential)
Development Works to develop	a	new hospital, pursuant to	the
buyers the manager talked and
Development Works Agreement. It was intended that First REIT would
negotiated with? And why did
have received a new healthcare facility by the first long stop date of
these talks and negotiations
28 June 2020.
fail?
7. I note that this divestment of	The Road Subsidence that took place on 18 December 2018 along Jalan
Gubeng, Surabaya, which is in close proximity to Siloam Hospitals
property is to Siloam. Has the
Surabaya, had had a serious impact on the Development Works, which
manager of the REIT considered
were no longer progressing. Given that the Development Works were
selling the property to other
no longer progressing, PT TPI had on 29 June 2020 served a termination
parties besides its sponsor? If
notice to PT SK to terminate the Development Works Agreement.
not, why not? Please elaborate.
Accordingly, the desired outcome to swap the aging Siloam Hospitals
8. Given that this divestment of	Surabaya with a new healthcare facility did not materialise.
property is to Siloam (its	Since the Road Subsidence,	the	Manager commissioned	tax
sponsor), how much effort was
consultants, development and construction-related consultants, legal
expended in the sale process?
counsels and valuers to carry out feasibility studies across various fields,
9. The proposed divestment, as an	to determine the possibility of conducting future construction works on
interested person transaction -	the site should the project be revived.
is it an arm's length transaction?	Having concluded the studies and discussions between the
	stakeholders, it was determined that restarting the development works
	is a complex matter and though it could result in First REIT receiving a
	new healthcare facility at a much later time, it consequentially meant
	that First REIT would incur additional development cost and thereby
	take on excessive development risk. It was determined that such risk
	should not be borne by First REIT.
	Perpetual (Asia) Limited, in its capacity as trustee of First REIT, has
	commissioned an independent valuer, Cushman & Wakefield VHS Pte.
	Ltd., in conjunction with KJPP Firman Suryantoro Sugeng Suzy Hartomo

• Rekan ("C&W"), and the Manager has commissioned an independent valuer, KJPP Willson & Rekan in association with Knight Frank ("Knight Frank", and together with C&W, the "Independent Valuers"), to respectively value Siloam Hospitals Surabaya. The agreed property value for Siloam Hospitals Surabaya of Rp.430.0 billion (approximately S$40.9 million) (the "Agreed Property Value") was negotiated on a willing-buyer and willing-seller basis with reference to the independent valuations by the Independent Valuers. While the Agreed Property Value represents an approximate 0.1% premium to the average of the

two independent valuations of Siloam Hospitals Surabaya of

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	Questions		Responses
				Rp.429,577,500,000 (approximately S$40.8 million) as at 31 January
				2022, it also represents a 143.2%4 gross premium over First REIT's
				original purchase consideration of S$16.8 million.
				The Divestment Consideration is estimated to be Rp.430.0 billion
				(approximately S$40.9 million) (subject to post-completion
				adjustments) based on the estimated net asset value of PT TPI as at
				completion of the Proposed Divestment, taking into account the
				Agreed Property Value.
				Knight Frank was also commissioned to conduct direct marketing of
				Siloam Hospitals Surabaya to 37 healthcare players of substantive
				regional and local presence, as well as presentations or site inspections
				for prospective buyers. However, none of the 37 healthcare players
				submitted an offer.
	10. I would assume that less effort		Knight Frank was commissioned to conduct direct marketing of Siloam
	was expended to search and		Hospitals Surabaya to 37 healthcare players of substantive regional and
	source for buyers (given it was a		local presence, as well as presentations or site inspections for
	sale to an interested party).		prospective buyers. However, none of the 37 healthcare players
	Given so, shouldn't the sponsor		submitted an offer.
	waive and forfeit its divestment		A divestment fee of approximately S$0.2 million (being 0.5% of the
	fees totally? Please justify why
		Agreed Property Value) is payable to the Manager for the Proposed
	we are still paying the sponsor
		Divestment pursuant to the Trust Deed (the "Divestment Fee"). As the
	divestment fees.
		Proposed Divestment is an Interested Party Transaction under
				Appendix 6 of the Code on Collective Investment Schemes issued by the
				Monetary Authority of Singapore (the "Property Funds Appendix"), the
				Divestment Fee will be in the form of Units which shall not be sold
				within one year of the date of issuance in accordance with Paragraph
				5.7 of the Property Funds Appendix.

4 The gross premium of 143.2% does not take into account the divestment by First REIT of 2,556 sq m for a consideration of S$8.2 million on 11 March 2016. Taking into account such divestment of 2,556 sq m for a consideration of S$8.2 million, the gross premium would be 192.0%.

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