PLife – BT

Parkway reit sets sights on local market

Group to explore opportunities for nursing homes collaboration

PARKWAY Life Reit is eyeing the local nursing home market after its forays into properties that provide long-term elderly care services in Japan.

‘We are looking to explore opportunities to collaborate with credible nursing care operators locally and regionally, as well as to expand the availability of quality nursing homes in Singapore to cater to people with different needs,’ said Yong Yean Chau, CEO of Parkway Trust Management, which manages the reit.

Plans are preliminary, but the trust’s manager is looking to discuss possible working models with interested parties. On a recent site visit to the reit’s nursing homes in Japan, Mr Yong expressed interest in helping them export their expertise to Singapore.

Like Japan, Singapore has a rapidly ageing population that will drive demand for nursing home places in the longer term, he said. ‘In Singapore, about 9 per cent of the population is currently aged 65 and above – the highest in South-east Asia.

‘The growing prevalence of nuclear families in modern societies also means fewer people will be available to take care of the needs of the elderly in future.

‘Nursing homes are increasingly becoming good alternatives for people to enjoy care, shelter and companionship outside of the family in their old age.’

Singapore has about 60-70 nursing homes, about half of which are run by the private sector and the rest by voluntary welfare organisations.

This is not sufficient to support the ageing population, with the number of people aged 65 and over expected to increase three times from 300,000 now to 900,000 by 2030, according to a Ministry of Health paper in 2006.

In a speech last year, Health Minister Khaw Boon Wan said the number of nursing home beds here will be boosted to 14,000 by 2020, from 9,200. The Health Ministry is already working with three existing nursing homes on rebuilding programmes that will increase bed numbers.

Besides the need to boost capacity, Parkway Trust Management’s Mr Yong says there is room for greater market segmentation and sophistication in the local nursing home sector.

‘With more product offerings, coupled with public education, we believe the perception and acceptance of nursing homes in Singapore will improve over time,’ he said.

‘Parkway Life Reit is keen to share its experiences and is at the preliminary stages of exploring the feasibility of collaborating with various stakeholders.’

Through a series of acquisitions in the past two-and-a-half years, the reit owns 29 properties in Japan, 28 of which are nursing home and care facilities.

These properties are leased mostly to nursing home operators that pay a guaranteed monthly rent, which may be pegged to inflation rate.

In Singapore, the reit’s assets include Mount Elizabeth, Gleneagles and Parkway East hospitals. For the quarter ended June, its assets in Japan accounted for 28 per cent of its net property income of $17.3 million.