Singapore REITs Buy 7 Japanese Senior Living Assets

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First REIT adds a nursing home near Nagoya (Source: First REIT)

Asian seniors are getting the respect and attention they deserve this month, especially from the managers of a Singapore real estate investment trust pair.

Manager of Parkway Life Real Estate Investment Trust said on Tuesday In the process of acquiring two nursing homes in the Tokyo metropolitan area for ¥2.88 billion ($20 million) from Japanese developer Daiwa House Industry as demand rises from Japan’s rapidly aging population to be.

Just a day after the announcement, First REIT managers followed suit Notify Singapore Exchange An agreement was reached to purchase two nursing care facilities, one in Aichi Prefecture and one in Kanagawa Prefecture, for a total of 2.58 billion yen.

The series of deals follows just days after Parkway Life notified SGX Purchased 3 nursing homes in Hokkaido At ¥2.56 billion, seven senior care assets worth a combined ¥8.02 billion ($56.2 million) by two REITs in Singapore were harvested in September.

Senior service

In an announcement Wednesday, First REIT said it would pay ¥1.45 billion to Komaki Real Estate Medical Rehabilitation Home Bonséjour Komaki in Aichi Prefecture, near Nagoya, and ¥1.13 billion to Royal Residence Ayase in Kanagawa Prefecture, near Tokyo. rice field.

Victor Tan, Executive Director and CEO of First REIT's management company said:

Victor Tan, Executive Director and CEO of First REIT’s management company said:

First REIT, which specializes in healthcare facilities across Asia, made its second acquisition of a Japanese nursing home this year, with the two properties yielding a combined net asset yield of 5.20%, according to filings with SGX .

“Japan is one of the key growth markets for First REIT. Penetration and expansion will enable First REIT to achieve stable long-term growth.”

Parkway REIT’s recent acquisition saw the trust acquire two properties from Japanese developer Daiwa House, with a total of 166 beds, including a nursing home in Tokyo’s Edogawa ward and another in Chiba, east of the capital. I got

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The acquisition brings Parkway REIT’s portfolio in Japan to 57 properties worth S$758.4 million.

Daiwa House, one of Japan’s largest home builders, is selling its aged property at an 11.1% discount compared to its July 31 valuation of ¥3.24 billion. Annual gross rental income.

Enhanced Presence

The acquisition of Parkway REIT, which is expected to close in the third quarter, is expected to generate a net asset earnings yield of 5.2% and increase the weighted average lease term of the trust’s portfolio to 17.21 years from the previous 17.05 years.

Both facilities will be managed by local asset manager Black Hills and fully occupied by Tokyo-based operator Zen Wellness Co with an average lease term of 29 years.

Parkway Life agreed to pay Tokyo’s Assisted Living Edogawa Ward 1.7 billion yen, or about 19.77 million yen per bed. At the Chiba facility, the trust is spending him 1.18 billion yen or 14.75 million yen for each bed in the 80-unit facility.

“Since 2008, we have used our first-mover advantage to expand our presence in the Japanese elderly care market. We aim to recognize and strengthen our Japanese portfolio with higher quality assets.”

senior return

The series of investments in Singapore REITs coincides with growing interest in Japan’s senior living sector, with Nuveen Real Estate, part of US investment agency TIAA, also betting on the market this year.

In July Nuveen Real Estate First Closing of $100 Million Japan Alternative Living Strategy We thank Dutch fund manager Bouwinvest and TIAA for their support.

a joint report A study released in May by Nuveen Real Estate and Strategic Insight showed that the current supply of senior housing in Japan remains limited as it is still provided by the government. With the population of Asia’s second-largest economy rapidly aging, Nuveen analysts have advised investors whose master lease term is 10 to 30 years from his and occupancy rates remain high at around 90%. I see it as an opportunity.

Nuveen notes that by 2040, citizens aged 75 and over are projected to make up 20% of Japan’s total population, up from 15% in 2020.

Abigail Dean, Global Head of Strategic Insights at Nuveen, said, “Japan’s aging population provides a unique opportunity to participate in the ‘housing’ of the senior housing sector through partnerships with reputable operators. opportunities for private institutional investors.

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