Parkway Life REIT

Parkway Life REIT: UOBKH issued a report upgrading PREIT to hold after it acquires 5 Japan nursing homes for $59m. PREIT has a first right of refusal over future sales of nursing homes from K.K Sawayaka Club (K.K, the vendor) Properties are expected to generate NPI yield of 7.9% and is leased back to K.K for a term of 20 years. The purchase is financed by 6-year yen-denominated loans at interest cost similar to current funding costs of 1.5%-1.7%. PREIT’s gearing will increase by 2.8ppt to 34.8%. PREIT will also benefit from interest savings from a refinancing scheme, where their next refinancing requirement is in 2015. TP: $2.39