| TOKYO, July 5
TOKYO, July 5 Shinsei Bank Ltd plans to
debut Japan's first real estate investment trust (REIT)
dedicated to building healthcare and housing facilities for the
elderly next year to meet growing demand from the world's
fastest ageing population.
The REIT would initially purchase assets worth 100 billion
yen ($1 billion), Shinsei Bank President Shigeki Toma told
Reuters, adding that the amount could double or triple within a
"Finally, the REIT has come within sight and if things go
smoothly, I think we can do this around next year," Toma said.
Some analysts said the Shinsei REIT would diversify
investors' portfolios in a sector dominated by residential and
commercial property trusts.
But they warned that healthcare assets were difficult to
evaluate and that finding reliable facility operators would be a
"The biggest challenge for healthcare finance is that they
need money from day-one but debt is paid back over the span of
15 to 20 years," Toma said. "So, we had to come up with
Mid-sized Shinsei bank, 21 percent owned by U.S. private
equity group J.C. Flowers, has been holding talks about the REIT
with the government for three years.
In March, a government-backed panel recommended launching
healthcare REITs to help finance the construction of elderly
care facilities, a development likely to hasten regulatory
approvals for the Shinsei trust.
Elderly facilities are among the holdings of some
Japanese-listed REITs such as Invincible Investment Corp
as well as Singapore-listed Parkway Life Real Estate
Investment Trust, but the Shinsei REIT would be the
first in Japan to completely focus on this sector.
Japan's population is expected to fall by 30 percent to
below 90 million by 2060, with two out of every five people aged
65 or older, according to government forecasts. Longer life
expectancy and limited living space are expected to increase the
demand for nursing homes as more Japanese choose to put their
parents into specialist care.
($1 = 99.6950 Japanese yen)
(Additional reporting by Taro Fuse; Editing by Miral Fahmy)