Mainboard-listed healthcare trust Parkway Life REIT (PLife REIT) has acquired five new nursing home properties in Japan for some S$46.8 million.
The properties will be bought from Yugen Kaisha, which is a subsidiary of Kenedix, a real estate asset manager in Japan.
PLife REIT had previously acquired 15 nursing home properties from Kenedix.
It said it is buying the properties because they are well-equipped, in good physical condition and strategically situated in dense residential districts.
PLife REIT added that each of the properties has a long term lease agreement with the operators, with a weighted average lease term to expiry of 17.45 years
It also said the stability of the overall portfolio will be further enhanced with backup operator agreements to be secured for the properties.
Furthermore, PLife REIT said Yugen Kaisha will provide a rental income guarantee in respect of the properties for a period of seven years capped at 5 percent of the purchase price.
Such a move will offer protection to PLife REIT and provides certainty for PLife REIT’s future distributions to its unitholders.
The acquisition is expected to be fully funded via a five-year committed unsecured revolving credit facility of up to S$48.5 million.
PLife REIT is expected to enter into an interest rate swap to hedge the interest rate for five years.
Source: Channel News Asia, 13 Jul 2010