In efforts to address a lack of senior care facilities to accommodate growing demographic shifts, investors in Japan are forming the nation’s first healthcare-focused real estate investment trust (REIT), which plans to manage 100 billion yen (US$975.1 million) in senior living assets.
Tokyo-based Kenedix, Inc., an independent real estate asset management company, is spearheading the formation of the REIT alongside Japan’s Shinsei Bank Ltd., development company Haseko Corporation, Mitsubishi UFJ Trust and Banking, property insurance company Sompo Japan and the LIXIL Group, a firm specializing in building design.
The REIT plans to invest at least 40 billion yen (US$390.1 million) in annual principal investments, targeting assisted living, residential private nursing homes, hospitals, clinics as well as other serviced residential facilities for seniors for acquisition and new development projects.
To manage these investments, the investors established Japan Senior Living Co., Ltd. to manage the the healthcare REIT, which will be represented by Kenedix President and CEO Taisuke Miyajima.
Though the investors did not specify if Japan would be their only market for target acquisitions, they did point to a need to develop healthcare solutions as part of the impetus for creating the REIT.
In terms of capital contribution, Kenedix will contribute the largest share of capital to the REIT at 60%, with Haseko at 20%, and the remaining four companies contributing 5% each.
“Each of the companies has a proven track record and experience in areas such as real estate asset management, finance, and the supply and operation of facilities, and each also holds a leading position in the financial, insurance, construction, real estate, housing construction materials and nursing care-related industries,” stated Kennedix in a release.
Japan is one of many countries facing overwhelming demand from its aging population that will outstrip the supply of available senior care facilities to care for them in the coming years. Similarly, the U.S. also faces its own “caregiver cliff.”
“The popularization and proliferation of healthcare REITs are expected to help stimulate the supply of new facilities and, in the process, enhance the residential stability of senior citizens,” Kennedix stated.
Going forward, the REIT expects a public offering by the latter half of 2014 in addition to its growth plans to manage 100 billion yen in assets.
Written by Jason Oliva