First Reit to buy 2 Japan nursing homes for 2.6 billion yen

THE manager of First Real Estate Investment Trust (Reit) has agreed to buy 2 nursing homes in Japan for 2.6 billion yen (S$26.3 million), as part of its expansion in a key growth market.

The freehold properties, Loyal Residence Ayase (Ayase) and Medical Rehabilitation Home Bon Séjour Komaki (Komaki), have a combined net property yield of 5.2 per cent.

The acquisitions will be fully funded by debt and are expected to be DPU (distribution per unit) accretive.

Ayase, a 3-storey nursing home with 80 rooms, is being sold by Japanese entity Trinity Hawaii for 1.13 billion yen. It has a gross floor area of 3,386.5 square metres (sq m) and is situated between Tokyo and Yokohama, or an hour's drive from Tokyo City Centre.

Komaki is a 10-storey nursing home building with a large open car park space. It comprises 124 rooms with 165 beds, with a gross floor area of 8,858.5 sq m.

Japanese entity Healthcare & Medical Investment Corporation is selling it for 1.45 billion yen. The property is situated near parks and facilities such as hospitals and community centres, and is a half-hour drive from Nagoya City Centre.

Following the acquisitions, developed markets will contribute to about one-quarter of First Reit's assets under management.

The Reit manager plans to step up growth in developed markets to more than 50 per cent of the overall portfolio. The Japan portfolio currently comprises 12 nursing homes acquired in March 2022.

The 2 additional nursing homes are operated by unrelated third-party operators. Ayase's operator Social Welfare Research Institute has been building a track record across all types of nursing care homes since 2007, said the manager.

Komaki's operator Benesse Style Care has a 19-year track record and operates more than 340 eldercare facilities.

The counter ended flat at S$0.275 on Wednesday (Sep 21).


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