PLife – Lim and Tan

Likely More Acquisitions In Near Future

• PLife has made another acquisition in Japan, 5 nursing homes this time for 3.1 bln yen / S$46.8 mln.

• Only a month ago, PLife had bought 6 nursing homes in Japan for 3.9 bln yen / S$60.5 mln.

COMMENTS

1. The latest acquisition follows the same template as all other acquisitions made in Japan. (PLife now has 24 healthcare-related properties in Japan, where at least 25% of the population is above 65 years of age.)

2. It is yield accretive, with proforma DPU rising to 8.35 cents, from 8.06 cents after the Jun 10^th
acquisitions.

3. That’s because the purchase, like previous ones in Japan, will be fully debt funded.

4. In fact, the interest rate of 1.8% pa is the lowest for PLife in all of its purchases in Japan, ie the yield accretion is correspondingly the highest.

5. Given the long life of the leases (17.45 years for the latest 5), it is arguable that PLife’s gearing, rising to 34.4% from 32.2% after the last acquisitions, should have further room to grow, ie allowing for more acquisitions.

6. Indeed, because of the low interest rates in Japan, PLife is expected to make moré acquisitions in Japan in the not-too-distant future.

7. At 1.34, yield is 6.2%, which we still find alluring.

8. Because of the successful formula or template, PLife, which has been one of the best performing reits in Singapore, tested the $1.40 high for the 7th time this morning. It had however closed at $1.40 on three occasions in March this year.