PARKWAY Life Real Estate Investment Trust (PLife Reit) has acquired four nursing homes and one group home in Japan from Marubeni Corporation, UBI Kabushiki Kaisha and UBI Capital Kabushiki Kaisha for 4.76 billion yen (about S$59.5 million).
The Reit's trustee, HSBC Institutional Trust Services, has through its wholly owned subsidiary, Parkway Life Japan4, entered into a silent partnership to acquire the properties, which are being acquired at a discount of 9.1 per cent to the valuation price of about 5.23 billion yen.
The properties are expected to generate a net property yield of 6.9 per cent, while the acquisition is slated for completion by the first quarter of 2017.
With this, PLife Reit will make its maiden foray into the Yamaguchi Prefecture and deepen its presence in the Chiba Prefecture within the Greater Tokyo Area.
Meanwhile, PLife Reit's tenant risk exposure will be further diversified with the addition of three new operators. Two of the operators are subsidiaries of Kabushiki Kaisha Habitation, which is PLife Reit's second largest nursing home operator in Japan.
With the new acquisition, PLife Reit's Japan portfolio will stand at approximately S$652 million, or about 38 per cent of total assets under management.
The properties will be on long-term master lease arrangement with balance lease term of approximately 20 to 30 years. The long balance lease arrangement serves to further improve the lease expiry profile of PLife Reit's entire portfolio by lengthening the weighted average lease term (by gross revenue) from 8.44 years to 9.81 years.