Singapore Press Holdings (SPH) is acquiring five aged-care assets in Japan for 5.26 billion yen (S$65.8 million) as it expands in markets with fast-ageing populations.
Three of the properties are in Hokkaido, with one each in Tokyo and Nara in the Osaka Metropolitan Region. The homes, with 365 beds in total, offer seniors independent living with community-based activities, transport and laundry, meals and care services.
Chief executive Ng Yat Chung said the move is in line with SPH's strategy of growing its recurring income base through the acquisition of cash-yielding assets in defensive sectors.
"We continue to seek opportunities to expand our aged-care business overseas," he said.
Two of SPH's special purpose vehicles entered into sale and purchase agreements for the acquisition, the media and property group, which publishes The Straits Times, said in an exchange filing just after midnight yesterday.
It marks SPH's first acquisition leveraging its tie-up in October last year with asset manager Bridge C Capital to set up a fund for investing in aged-care and healthcare assets in Japan.
Asset management fees will be generated as part of the fund, eventually adding to the recurring income stream, said SPH.
The Japanese properties will continue to be managed by the existing operators on leases averaging 23.4 years.
SPH deputy chief executive Anthony Tan said the move builds on SPH's acquisition in 2017 of Orange Valley, one of Singapore's largest private nursing home operators.
He noted: "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."
SPH said data from a national research institute in Japan suggests that the proportion of its elderly population (65 years and above) is projected to rise to 30 per cent by 2025.
It added that senior-care offerings, including home, facility and the elderly-care market, will be worth an estimated 15 trillion yen in 2025.
The acquisition, which is expected to be completed next month, will be fully paid for in cash and funded through internal and external resources, said SPH.
It is not expected to have a material effect on the net tangible assets per share or earnings per share of the company for this financial year.
SPH shares closed down four cents, or 2 per cent, at $1.97 yesterday.