Parkway Life REIT (PLife REIT) is acquiring a nursing home in the Greater Tokyo Region for JPY3,200 million (SGD37.92 million).
It is the REIT’s third acquisition in Japan for 2021, and will bring its portfolio in the country to 52 properties, totalling approximately SGD804.03 million in value.
The acquisition will be made at approximately 7.0% below valuation and is expected to generate a net property yield of 5.9%, said the REIT.
The property is operated by Fuyo Shoji Kabushiki Kaisha, a wholly-owned subsidiary of Habitation Group - PLife REIT’s largest nursing home operator in Japan.
"The acquisition delivers immediate yield growth and enhances the resiliency of our portfolio with a long stable lease", said Yong Yean Chau, CEO of the REIT's manager.
"As we continue to grow our footprint in Japan, which is our valued core market, we recognise the importance of developing sustainable long-term partnership with credible operators with synergic business strategies", he added.
The acquisition of the property is expected to complete by December 2021.
The acquisition will be fully funded by JPY debts, which provides a natural hedge for the foreign exchange risks.
The REIT’s gearing level post-acquisition will increase from 34.9% to 36.0%.
PLife REIT was last done on the Singapore Exchange (SGX) at SGD5.07, which presently implies a distribution yield of 2.81% according to data on the Singapore REITs table.