First REIT says it has received a "preliminary non-binding letter of intent" from PT Siloam International Hospitals to acquire its portfolio of hospital assets in Indonesia.

First REIT jumps almost 4% on the news.

Siloam is the existing tenant and operator of these hospital assets and is majority-owned and controlled by a fund managed by CVC Capital Partners.

Besides the hospitals in Indonesia, First REIT owns nursing homes in Singapore and Japan as well.

According to First REIT, it is undertaking a strategic review to assess the LOI and explore all strategic options.

"Through the strategic review, the board is committed to undertaking a rigorous process to consider all options relating to the business of First REIT, which may include but are not limited to, exploration of joint ventures, strategic partnerships, asset acquisitions and/or asset divestments, with a view to delivering sustainable long-term value for First REIT’s unitholders," says First REIT.

First REIT has appointed Citigroup Global Markets Singapore to assist in conducting the review.

The REIT says for now there is no certainty or assurance that any transaction will materialise from the review or the LOI, or that a definitive or binding agreement will be reached relating to any of the assets of First REIT. 

"Any proposed transaction will be subject to, among other things, commercial negotiations, the outcome of the strategic review and approvals in compliance with applicable regulatory requirements," says First REIT.

First REIT units closed at 26 cents on Jan 13, unchanged for the day but down 5.56% in the past 12 months.