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PLife Reit acquires nursing home in Japan for 1.1b yen

PARKWAY Life Reit (PLife Reit) has acquired another nursing home facility in Japan for 1.1 billion yen (S$13.4 million), said its manager Parkway Trust Management on Thursday.

The facility, Silver Heights Hitsujigaoka Ichiban-kan & Niban-kan, has been acquired from Sapporo-based nursing home operator Kabushiki Kaisha Silver Heights Sapporo.

The acquisition, targeted for completion by the first quarter, is expected to generate a net property yield of 6.7 per cent. It will be funded via long-term Japanese yen-denominated debts.

HSBC Institutional Trust Services (Singapore), as trustee of PLife Reit, has through its wholly owned subsidiary, Parkway Life Japan Pte Ltd, entered into a Tokumei Kumiai agreement for the acquisition of the property.

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This agreement is a silent partnership, similar to the holding structure for PLife Reit's previous acquisitions in Japan.

"With each acquisition, we seek to strengthen the quality of our portfolio and build on our stable and defensive foundation for sustained growth of PLife REIT," said Yong Yean Chau, CEO of the Reit manager.

The property is located in the residential neighbourhood within Sapporo City, capital city of Hokkaido prefecture, near to Fukuzumi train station. As at Dec 31, 2015, the operating occupancy of the property is healthy at 94 per cent.

A fresh 20-year master lease arrangement is secured with the vendor. This acquisition brings the weighted average lease expiry of PLife Reit's portfolio (by gross revenue) from 9.12 years to 9.23 years.