Wrong place, wrong time for First REIT’s CEO Victor Tan
First REIT was met with a series of unfortunate problems since Victor Tan stepped up to be the CEO in 2017.
Terence Wong, CFA
CEO and Executive Director
Mar 4, 2019
It has been a tough time for Victor Tan since he took over the helm at First REIT in 2017. He was the CFO of the REIT for over 10 years before becoming the CEO. First REIT manages hospital assets largely in Indonesia, and was a favourite among institutions for offering yields of over 8%. Lippo Group is the controlling shareholder and it is this connection that have resulted in a major slide in its share price, including a 16% slump over a 3-day period last November (unprecedented for a REIT). This was due to Lippo being investigated for bribery in Indonesia.
Problems do not end there for First REIT. There are rumours swirling that it’s sponsor Lippo Karawaci may sell be selling its stake to raise cash. The latter has been heavily subsidising the REIT over the past years. While Lippo Karawaci collects S$12m in rental from Siloam hospital in Indonesia, the former pays First REIT S$91m. Looks like Victor still have a lot on his plate before turning the ship around.