Trend to build nursing home investment portfolios growing
MELBOURNE: The trend towards building international nursing home investment portfolios continues to attract new entrants.
Singapore Press Holdings (SPH) has announced within a week its second investment abroad in the aged-care business – the acquisition of a portfolio of assets in Canada for C$232.9 million (S$244.5 million).
The acquisitions are in line with the media and property group’s strategy of expanding its aged-care and healthcare business in overseas markets with favourable demographics. SPH on Monday announced the purchase of five senior independent living assets in Japan for 5.26 billion yen (S$65.8 million).
The six freehold assets comprise five properties in Ontario and one in Saskatchewan. With 717 suites in total and an average age of around seven years, the properties provide independent and assisted living accommodation and services to seniors, SPH said.
SPH chief executive officer Ng Yat Chung said: “We continue to seek cash-yielding assets in defensive sectors to build up our recurring income base.”
Currently managed by Hawthorn Senior Living, the properties have consistently achieved occupancy rates of over 90 per cent in the past three years, said SPH.
The company entered the aged-care business in 2017 with its acquisition of Orange Valley, one of Singapore’s largest private nursing home operators.
Its Canadian acquisition, expected to complete by May 2020, will be funded by a combination of internal funds and debt, said SPH, which publishes The Straits Times.
The deal, entered into with affiliates of Columbia Pacific Advisors, is subject to satisfactory due diligence.
Citing World Bank and other data, SPH said Canada has one of the highest average life expectancies globally, at 82 years, with the number of people 75 years and older growing by 52.6 per cent over the next decade. Demand for independent living and assisted living services is projected to rise with an additional 199,000 beds required by 2035, up from 263,000 beds currently. But the Canadian seniors housing market remains fragmented with over 250,000 seniors living in more than 2,900 seniors housing residences.
SPH said the top five national operators in Canada collectively service less than 20 per cent of the existing total supply of seniors housing and care properties, offering an attractive market opportunity for it to tap.
SPH deputy CEO Anthony Tan said: “In developed economies like Canada, Japan and Singapore, the growth prospects for services targeted at older persons like independent living facilities and healthcare are good. We will continue to seek opportunities in the senior living sector in economies with similar characteristics.”
