SINGAPORE (Feb 20): Parkway Life REIT has acquired four nursing homes and one dementia group nursing home in Japan from Marubeni Corporation, UBI Kabushiki Kaisha and UBI Capital Kabushiki Kaisha for ¥4.76 billion (S$59.5 million).

This is part of an asset recycling exercise to rebalance and strengthen the its Japan portfolio.

The acquisition price represents a discount of 9.1% to the valuation price of about ¥5.23 billion.

The properties are expected to generate a net property yield of 6.9%.

The purchase will be partially funded by capital proceeds from the divestment of four nursing homes in Japan that were completed in Dec last year, and partially via long-term yen-denominated debts.

The properties will be on a long-term master lease arrangement with a balance lease term of 20 to 30 years.

The long balance lease arrangement serves to further improve the lease expiry profile of Parkway Life REIT’s entire portfolio by extending the weighted average lease term (by gross revenue) from 8.44 years to 9.81 years.

After the acquisition, Parkway Life REIT’s gearing will increase from 36.3% as at Dec 31, 2016, to 37.5%.

Units of Parkway Life REIT are up 4 Singapore cents at S$2.45.