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First REIT secures $16.9 mil social loan from Japan's Shinsei Bank

Felicia Tan
·2-min read

Including the latest social loan, social loans and debts will comprise about one quarter of the REIT’s debts.

The manager of First REIT, on Sept 29, announced that First REIT Japan 2 Godo Kaisha has secured a 1.66 billion yen ($16.9 million) non-recourse social loan from Shinsei Bank, a leading diversified Japanese financial institution.

A godo kaisha is a common structure that is adopted for investment in real estate under Japanese law.

The full proceeds from the social loan partly funded the 2.6 billion yen acquisition by First REIT Japan 2 Godo Kaisha, where it acquired the trust beneficial interest in each of Loyal Residence Ayase (Ayase) and Medical Rehabilitation Home Bon Séjour Komaki (Komaki).

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According to First REIT, Shinsei Bank assessed that the social impact from providing funding for the acquisitions include securing houses where elderly people can lead their daily lives with a peace of mind, and promoting women’s active participation in society.

The remaining financing of the acquisitions was funded by SGD debt.

The acquisitions of the trust beneficial interest in Komaki and Ayase were completed on Sept 27 and Sept 29 respectively.

“Having successfully priced Singapore’s first healthcare social bond in April 2022, we are pleased to have secured a second funding facility that also ties financing to achieving specific social benefit outcomes that contribute to the United Nations Sustainable Development Goals,” says Victor Tan, executive director and CEO of the manager.

“This diversification of our funding sources with social bonds or loans not only optimises our financial position but is also a reflection of our resolution to ride on sustainability and demographics megatrends. As we roll out our 2.0 growth strategy, First REIT as a healthcare REIT will continue to focus on enhancing value for our unitholders while also creating meaningful social impact,” he adds.

Including the latest social loan, social loans and debts will comprise about one quarter of the REIT’s debts.

Units in First REIT closed flat at 26.5 cents on Sept 29.

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