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Parkway Holdings Establishes Parkway Life REIT
By Derek  •  June 2, 2007
By: Derek Lim I can't wait to get my hands on this. A great investment to diversify my portfolio further. I will have to re-channel some of my funds for this - will most probably sell my under performing stocks.
  • Parkway to sponsor the establishment of Asia’s largest healthcare REIT
  • Proposed sale and leaseback of three landmark properties with Parkway Life REIT

SINGAPORE, 25 May 2007
Parkway Holdings Limited (“Parkway” or “the Group”), one of Asia’s leading healthcare service providers, is pleased to announce its intention to sponsor the establishment of a real estate investment trust to be known as “Parkway Life REIT”.

In connection with the establishment of Parkway Life REIT, Parkway will grant to Parkway Life REIT long-term leases in three properties, which are the Mount Elizabeth Hospital Property (a 67-year term), the Gleneagles Hospital Property (a 75- year term) and the East Shore Hospital Property (a 75-year term) (collectively, the “Properties”), for consideration in the form of cash and units. The aggregate consideration for the Properties will not be lower than S$765 million, and not more than what is permitted under the Property Funds Guidelines (issued by the Monetary Authority of Singapore ("MAS") as Appendix 2 to the Code on Collective Investment

In conjunction with the long-term leases in the Properties, Parkway intends to lease the Properties back from Parkway Life REIT for an initial term of 15 years, with an option to extend the lease for a further term of 15 years. Furthermore, it is proposed that Parkway Trust Management Limited (currently known as PHR Management Pte. Ltd.), a wholly-owned subsidiary of the Group be appointed the manager of Parkway Life REIT.

The proposed transactions will be subject to shareholders’ approval at an extraordinary general meeting to be convened.

“The establishment of Parkway Life REIT will create an integrated and synergistic platform that will spur the acquisition of hospitals and healthcare-related assets in the region, thus enabling Parkway to expand its footprint and position the Group for potential growth in the healthcare sector across Asia Pacific,” said Dr Lim Cheok Peng, Managing Director of Parkway.

Parkway intends to use the net proceeds from the disposal of the Properties to pursue investment opportunities in the Asia-Pacific healthcare markets, distribute special dividends to shareholders, refinance existing debt obligations and/or general corporate and working capital purposes.

Additionally, Parkway will retain a stake in Parkway Life REIT, allowing the Group to enjoy steady and growing distributable income as the REIT’s strategy is to pursue yield accretive acquisitions in the Asia-Pacific region.

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By Derek
Derek is an investor who follows Peter Lynch style of investing. He prefers to use simple and straight forward information for stock analysis. He started with the intention to bring together all bloggers and professionals who are interested or already in the area of Finance and Investing, and to create a community where everyone is free to write and to share their articles, experience and opinions.

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