Parkway Life REIT

Parkway Life REIT: Purchased Japanese nursing home and care facility, Ocean View Shonan Arasaki, for ¥1.7b ($18.9m), a discount of 6% below its market valuation. The property is located in the residential area of Yokosuka City in the Kanagawa Prefecture. PLife secured a fresh 20-year master lease arrangement with the seller, Oueikikaku Kabushiki Kaisha, at an annual gross rental of ¥130.9m ($1.45m), 1.4% of PLife’s 3Q annualized revenue of $100.4m. This equates to a 6.9% NPI yield. The accretive acquisition is expected to extend the Reit's overall weighted average lease expiry (by gross revenue) from 10 years to 10.1, and raise its gearing from 33.3% to 35.1%. Market watchers reckon that the move may pave the way for future opportunities with Ouekikaku and is also part of PLife’s asset rejuvenation exercise. At 1.4x P/B and 5.4% dividend yield, PLife trades at a premium compared to its healthcare REIT peers’ valuation at 0.9x P/B and 7.4% yield. Latest broker ratings: CIMB maintains Add and raises TP to $2.63 (from $2.61)