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Parkway Life Real Estate Investment Trust (PLife REIT) has agreed to acquire five nursing homes in Japan from Marubeni Corporation, UBI Kabushiki Kaisha and UBI Capital Kabushiki Kaisha.
The total consideration will amount to 4.76 billion yen (S$59.5 million), which translates to a discount of around 9.1 percent from their combined valuation of 5.23 billion yen (approximately S$65.4 million), as assessed by K.K. Halifax Associates (Colliers International Tokyo) as of 31 December 2016.
Two of the five properties are located in Yachimata City, another two in Kudamatsu City, while the remaining one is situated in Chiba City.
With these new acquisitions, PLife REIT’s Japanese portfolio will rise to approximately S$652 million, accounting for about 38 percent of its total assets under management. These five nursing homes are also expected to generate a net property yield of 6.9 percent.
The acquisitions are targeted to be completed by the first quarter of 2017.
According to Yong Yean Chau, CEO of Parkway Trust Management Limited, the trust manager, the acquisitions leverage on Japan’s aging demographics.
Last December, approximately 25 percent of the Japanese populace were aged 65 and above. But by 2040, this group is expected to make up over 33 percent of the country’s overall population. Given this trend, long-term senior care facilities would see higher demand. In fact, approximately 520,000 seniors there were on the waiting lists for placements in nursing homes nationwide last year.
Touted as one of Asia’s largest listed healthcare trusts by asset size, PLife REIT owns a portfolio of 44 properties collectively valued at S$1.7 billion as of 31 December 2016. These include private hospitals in Singapore, namely Gleneagles Hospital, Parkway East Hospital and Mount Elizabeth Hospital.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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