Parkway Life REIT Sells Japan Industrial Property to Hulic

Japan photo by Jezael Melgoza on Unsplash.

Parkway Life Real Estate Investment Trust (PLife REIT), one of Asia’s largest listed healthcare REITs by asset size, has sold an industrial property in Japan to real estate investment firm Hulic Co for JPY2.9 billion ($27.7 million).

The sale consideration for the property, known as P-Life Matsudo, has been paid in cash by Hulic after the relevant adjustments have been made, according to PLife REIT’s manager, Parkway Trust Management Limited.

PLife REIT acquired the property in May 2008 for JPY2.59 billion. It has a net operating income yield of 5.3 per cent. As of December 31, 2020, the property net book value was approximately SGD31 million and the valuation stood at JPY2.41 billion.

The total sale consideration of JPY2.9 billion was arrived at on a willing-buyer, willing-seller basis taking into account the latest valuation, and is 20.3 per cent above the latest valuation, 19.8 percent above the net book value, and 12 per cent above the original purchase price of the property.

PLife REIT is expected to recognise an estimated gain on disposal of investment property(before tax) of approximately S$5.1million.

“The proceeds received from the divestment will provide greater financial flexibility to seize other attractive investment opportunities offering better value as PLife REIT seeks to strengthen its position in its existing key markets,” the REIT’s manager said.

Currently, PLife REIT’sJapan portfolio of 50 properties consists mainly of nursing homes diversified across various prefectures, contributing 96.7 per cent its Japan portfolio’s revenue.

“The divestment, which sees us divesting our non-core asset, resonates well with our recycling strategy to rebalance and strengthen the growth potential of our Japan Portfolio,” Yong Yean Chau, Chief Executive Officer of the Manager, said.

PLife REIT owns a well-diversified portfolio of 54 properties with a total portfolio size of approximately S$2.02billion as of 31 December 2020. It owns the largest portfolio of strategically located private hospitals in Singapore comprising Mount Elizabeth Hospital, Gleneagles Hospital, and Parkway East Hospital.

In addition, it has 50 assets located in Japan, including one pharmaceutical product distributing and manufacturing facility in Chiba Prefecture as well as 49 high-quality nursing home and care facility properties in various prefectures of Japan. –