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PARKWAY Life Real Estate Investment Trust (Reit) said on Friday that it bought a nursing home property in Fukuoka, Japan, for 3.5 billion yen (S$38.5 million).
The acquisition price is in line with an independent valuation by KK Halifax Associates that placed the property's value at 3.5 billion yen. The property sits above the Yakuin Odori train station in a high-end residential area of central Fukuoka City, Parkway Life said.
The property has a balance lease term of 20 years, and will extend Parkway Life's portfolio weighted average lease term to expiry to 10 years from 9.87 years.
The nursing home has a current operational occupancy of 92 per cent.
The healthcare Reit will fund the acquisition with a five-year yen-denominated term loan facility. After the purchase, Parkway Life's gearing will increase to 35.1 per cent from 33.3 per cent.
"The acquisition is part of our continual efforts to strengthen our stable, defensive foundation so that we are well-positioned to ride on the back of unprecedented growth in the Japan healthcare sector," said Yong Yean Chau, chief executive of the manager of Parkway Life.