Parkway Life REIT (PLife REIT) is acquiring two nursing homes in the Greater Tokyo region from Daiwa House for a total consideration of JPY2,880 million (SGD29.4 million).

The acquisition will be made at approximately 11.1% below valuation and is expected to generate a net property income yield of 5.2%.

Both properties are freehold and were developed by Daiwa House.

“The two well-located properties will not only strengthen our portfolio but also initiate a new collaboration with Daiwa House, a reputable real estate developer in Japan”, said Yong Yean Chau, CEO of Parkway Life REIT’s manager.

“The acquisition will mark the first step for PLife REIT to work with Daiwa House and pave the way for future pipelines of quality assets”.

The acquisition will be fully funded by JPY debts.

Following this acquisition and the earlier acquisition of three other nursing homes in Japan, the REIT’s leverage ratio will increase from 32.5% to approximately 34.3%.

The acquisition is expected to be completed by Q3 2022.

Once the transaction is settled, PLife REIT’s Japan portfolio will consist of 57 properties, totalling approximately SGD758.4 million in value.

PLife REIT was last done on the Singapore Exchange at SGD4.62, which presently implies a distribution yield of 3.06% according to data on the Singapore REITs table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.