Five aged care assets in Japan have been acquired by the Singaporean media organisation, Singapore Press Holdings (SPH) for S$65.8 million as the company expands its presence abroad in markets with fast-ageing populations.
Hokkaido houses three of the properties, with one each in Nara in the Osaka Metropolitan Region and Tokyo. There are 365 total beds in the properties that provide independent living with community-based meals and care services, transport and laundry and activities.
By acquiring cash yielding assets in defensive sectors, the firm can grow its recurring income base as a strategy of SPH, its Chief executive officer Ng Yat Chung pointed out: “We continue to seek opportunities to expand our aged care business overseas.”
At an exchange filing on Monday (24 Feb), SPH announced that two of SPH’s special purpose vehicles inked sale and purchase agreements for the asset acquisition.
This acquisition is the first by SPH which leveraged the partnership it formed with asset manager Bridge C Capital in October 2019. Through the partnership, a fund investing in healthcare and aged care assets in Japan has been established.
As part of the fund, asset management fees will be generated which will be combined with the recurring income stream from the assets, SPH stated.
Management of properties in Japan will be continually carried out by the current operators on long leases of 23.4 years on average.
The Deputy CEO of SPH, Anthony Tan remarked that this new acquisition in Japan is a move that progresses from SPH’s acquisition of Orang Valley in 2017, which is one of Singapore’s biggest private nursing home operators.
“We believe that the aged care industry is set for continued growth in countries with fast-ageing populations like Singapore and Japan. We will continue to leverage on the track record and network of Bridge C to explore future growth opportunities in Japan,” Mr Anthony stated.
SPH stated that, based on data from a national research institute in Japan, the proportion of Japan’s elderly population (65 years and above) is predicted to increase to 30 per cent by 2025. The elderly care market, and senior care offerings such as facility and home are projected to be worth S$188 billion in 2025.
Funded by internal and external resources, while being fully paid for in cash, the acquisition is expected to be completed by March this year, SPH added.
For SPH’s current financial year, material effect on the net tangible assets per share or earnings per share is not expected. On Friday (21 Feb), the company’s shares closed at an unchanged value of S2.01.