Parkway Life REIT's manager has announced an acquisition of 11 nursing homes in France with 850 beds and 100% occupancy for the equivalent of $159.9 million from DomusVi Group, where the latter will continue to operate the properties under a sale and leaseback arrangement for 12 years.
The manager of Parkway Life REIT says France has an ageing population with over 22% of residents over 65 years old in 2023.
Nursing homes in France are regulated, and there is no new supply till 2028. The supply is limited to one bed available for every 10 citizens over 65 years old.
"Driven by this demographic shift, the nursing home sector in France presents significant growth potential, supported by its regulated and resilient care system and the nation’s comprehensive statutory health insurance system," the manager says.
Parkway Life REIT intends to fully finance the acquisition via an equity fund raising by way of a private placement to raise $180 million. This will be Parkway Life REIT's first-ever equity fund raising.
The acquisition is expected to be 1.6% distribution per unit (DPU) accretive, and 4.4% net asset value (NAV) accretive.
See also: Elite UK REIT to divest Hilden House for GBP3.3 mil
On a pro forma basis, DPU would be 15 cents in FY2023 compared to 14.77 cents, and NAV would be $2.44 per share instead of $2.34 per share.
The stock closed at $3.99 on Oct 21.
