PLife REIT to acquire 2 Japan assets for S$23.1m

It is expected to generate a net property yield of 7.1%.

In a release, Parkway Trust Management Limited announced that it will be making two further acquisitions in Japan as part of plans to continue growing its Japan portfolio.

Properties to be acquired at attractive capitalisation rates

HSBC Institutional Trust Services Limited, 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 two nursing home properties located in Japan at a combined purchase price of approximately S$23.1 million (JPY1.755 billion)

The purchase price for each of the Properties was arrived at on a willing-buyer and willing-seller basis after taking into account the valuation of the Properties by the independent valuer.

The acquisition of the Properties is expected to generate a net property yield of 7.1%, and is expected to be completed by 12 July 2013.

The acquisition will be funded via a 5-year committed and unsecured JPY term loan facility at an all-in cost of approximately 1.55% per annum. The deployment of JPY debt provides a natural hedge to mitigate foreign exchange risks arising from JPY denominated assets.

With this funding, PLife REIT’s gearing is expected to increase to approximately 31.8% as at 31 May 2013.