SINGAPORE - Singapore Press Holdings (SPH) is acquiring five aged care assets in Japan for 5.26 billion yen (S$65.8 million) as it expands overseas 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 properties, with 365 beds in total, offer seniors independent living with community-based activities, transport and laundry, meals and care services.
Chief executive officer 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, said the media and property group in an exchange filing just after midnight on Monday (Feb 24).
It marks SPH's first acquisition from leveraging on 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 from the assets, said SPH, whiich publishes The Straits Times.
The properties in Japan will continue to be managed by the current operators on long leases averaging 23.4 years.
Mr Anthony Tan, SPH deputy CEO, said the move builds on SPH's acquisition in 2017 of Orange Valley, one of Singapore's largest private nursing home operators.
He said: "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."
Citing data from a national research institute in Japan, SPH said 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 are estimated to be worth 15 trillion yen (S188 billion) in 2025.
The acquisition, which is expected to complete by March 2020, will be fully paid for in cash and funded through internal as well as 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 the current financial year.
SPH shares closed unchanged at $2.01 on Friday.