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Parkway Life Real Estate Investment Trust (Reit) is acquiring a nursing home property in Osaka, Japan, for 2.4 billion yen (S$20.7 million), its manager said on Tuesday (Jul 30).
The acquisition, which is at about 9.1 per cent below valuation, was made from Japanese company FDS – which also developed the site. It is expected to be completed in the third quarter of this year.
This takes the healthcare-focused trust’s Japan portfolio to 60 properties, totalling about S$676.8 million.
The freehold property – Hibisu Higashi Sumiyoshi – was built in June this year and is located in Osaka’s residential area.
Parkway Life Reit will take over the existing master lease agreement from FDS. With a balance lease term of about 30 years, the Reit’s weighted average lease expiry by gross revenue increases to about 16.17 years from 16.05 years.
Additionally, the acquisition is set to increase its leverage ratio to 35.9 per cent, from 35.3 per cent as at Jun 30.
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It is fully funded by yen debt, which “provides a natural hedge for the foreign exchange risks arising from yen-denominated assets and mitigates against potential currency volatility”, the manager noted.
Chief executive of the manager Yong Yean Chau said: “Japan remains a crucial core market for Parkway Life Reit as we drive our next phase of growth.”
As at Dec 31, the Reit owns a portfolio of 63 properties across the Asia-Pacific region, amounting to about S$2.3 billion. It has 59 assets of nursing home and care facility properties across Japan.
Units of the Reit traded 0.3 per cent or S$0.01 lower at S$3.62, as at the mid-day trading break on Wednesday.
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