Through proactive asset management, PLife REIT constantly strives to maximise portfolio performance in order to enhance the revenue-generating ability of its properties and ensure sustainable earnings for its Unitholders.
As part of PLife REIT’s initiative to drive organic growth and foster good Landlord-Lessee relationships, it seeks to work closely with its Lessees to understand their operational requirements and embark on Asset Enhancement Initiatives (“AEIs”) which are tailored to suit the needs of its healthcare operators and end users of the properties. Such strategic collaborative arrangements serve to benefit all parties and promote greater revenue sustainability for PLife REIT.
PLife REIT has, leveraging on its clustering/ partnering approach and good landlord-lessee relationships, successfully expanded its nursing home portfolio and completed nine AEIs in Japan since its maiden entry in 2008 and one at its Malaysia property (Gleneagles Intan Medical Centre).
The ninth Japan AEI was completed on September 2016 at the Sawayaka Kiyotakan property. A dedicated elevator at the exterior of the building was installed to serve the Day Service Centre located on Level 3 of the property. The returns from this AEI is attractive with rent increasing by 4.7% for unexpired lease term of 17 years.
Moving forward, PLife REIT remains committed to exploring and rolling out more of such AEIs across its entire portfolio to extract the greatest value from its properties. To further strengthen PLife REIT's earnings resiliency, it is also focused on consolidation efforts for its Japan portfolio to optimise operating synergies and achieve greater cost savings.
In line with PLife REIT's strategy to rebalance and strengthen the overall quality and growth potential of its Japan portfolio, PLife REIT completed the second divestment of four nursing homes in Japan on 22 December 2016. The Sale price of ¥3,720,000,000 was approximately 34.4% higher than the original purchase price, 5.1% higher than the net book value and 4.8% higher than the latest independent valuation. As PLife REIT remains competitive in its acquisition activities, the divestment proceeds will provide greater flexibility and speed for it to seize other attractive investment opportunities to strengthen its foothold.