Parkway Life Reit buys 3 nursing homes in France for US$43.5 million

[SINGAPORE] Parkway Life Real Estate Investment Trust (Reit) has acquired three nursing homes in France for 38.8 million euros (US$43.5 million), expanding its presence in one of its three key markets.

The debt-funded acquisition is expected to be completed by December. The properties will be leased back to DomusVi Group, which is selling the nursing homes to Parkway Life Reit.

After the deal is completed, the Reit’s French portfolio will comprise 14 properties with an aggregate value of about S$234.3 million. This represents about 10 per cent of its assets under management, said its manager on Wednesday (Oct 14).

“Building on our partnership with DomusVi since 2024, this off-market transaction expands our footprint in France and positions us to capture further growth opportunities,” said Yong Yean Chau, the manager’s CEO and executive director.

Long-term leases

The three nursing homes are located in the Provence-Alpes-Cote d’Azur region, in and around Marseille, France’s second-largest city.

Their catchment areas have established elderly populations, supporting “sustained demand for aged-care services”, said Parkway Life Reit’s manager.

Each property is subject to a 12-year lease, which the manager said would provide the Reit with “enhanced income visibility and a stable and resilient income stream”.

“The lease structure also provides a natural hedge against inflationary pressures, supporting the sustainability of rental income amid rising operating costs and interest rate volatility,” it added.

The total acquisition outlay, including estimated capitalised costs and other acquisition-related expenses, is expected to be about 43.4 million euros.

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Parkway Life Reit’s aggregate leverage is expected to rise from about 33.8 per cent as at Jun 30 to about 35.3 per cent once the deal is completed.

The Reit made its first investment in Europe in 2024, acquiring 11 nursing homes in France for about 111.2 million euros. It also sold a Japan nursing home property for 1.165 billion Japanese yen (US$7.2 million) in June this year to recycle capital.

Units of Parkway Life Reit rose 0.3 per cent or S$0.01 to close at S$4.00 on Wednesday, after the deal was announced.