OCBC Investment Research upgraded healthcare real estate investment trust First REIT to 'buy' from 'hold' and raised its target price to S$0.96 from S$0.935, citing the possibility of acquisitions.

Units of First REIT were flat at S$0.915 on Friday and have gained around 21 percent so far this year.

OCBC said First REIT could see a distribution per unit accretion of 9 to 13 percent in 2013 fiscal year, assuming the firm acquires two hospitals for around S$88.9 million ($69.43 million).

It expects minimal dilution risk as any acquisitions would likely be fully debt-funded. First REIT will not have any refinancing requirements until 2015 following the firm's recent S$168 million transferable term loan facility, OCBC added.

OCBC also said First REIT's defensive income streams and stability from its long-term master leases are attractive as volatility in the macro economy and global markets is unlikely to dissipate in the near term.

1047 (0247 GMT)

(Reporting by Leonard How in Singapore; leonard.how@thomsonreuters.com)