PLife Reit to acquire nursing home in Japan for 1.65 billion yen

PARKWAY Life Reit (PLife Reit) is acquiring a nursing home in the Greater Tokyo region from aged care operator KK Habitation for 1.65 billion yen (S$21.2 million).

In a filing to the Singapore Exchange, PLife Reit's manager said that the purchase is being made at about 4.6 per cent below valuation, and will generate a net property yield of 6.4 per cent.

The 100-bed nursing home is located in the residential area of Kamagaya City within the Chiba Prefecture. With the latest acquisition, PLife Reit will secure a fresh 20-year master lease agreement and lengthen the weighted average lease expiry (WALE) for PLife Reit's Japan portfolio from 11.19 years to 11.44 years.

The acquisition will be funded by a long-term yen loan facility, so as to protect the Reit from potential currency fluctuations and achieve a stable net asset value. Post acquisition, PLife Reit's gearing level will go up to 39.3 per cent, from 38.6 per cent as at Sept 30.

Yong Yean Chau, chief executive of the Reit's manager, said: "This acquisition not only strengthens our presence in Japan but also boosts the resilience of our portfolio by delivering immediate growth. We continue to build strong long-term relationships with local players with synergic business strategies to ensure that we continue to identify strong quality assets, which will lead to sustainable returns for unitholders."

Units in PLife Reit closed at S$3.82 on Thursday, up two Singapore cents or 0.53 per cent.