PETALING JAYA: IHH Healthcare Bhd and Parkway Life Real Estate Investment Trust (PLife REIT) have agreed to extend the lease of three hospitals in Singapore owned by the latter for an additional 20 years.

       In a statement yesterday, IHH said that the lease terms for Mount Elizabeth Hospital Property, Gleneagles Hospital Property and Parkway East Hospital Property will end on Dec 31, 2042, following the extension that will be effective on Aug 23, 2022.

       There is also an option to renew for a further 10 years from Jan 1, 2043 to Dec 31, 2052.

       The extended leases would also cover medical centre units, retail units and car park lots, where applicable, for each hospital.

       IHH said the new master lease agreements provide business continuity and stability of operations for the group in Singapore and a sustained rental income stream for PLife REIT.

       The new master lease agreements will be entered into between HSBC Institutional Trust Services (Singapore) Ltd, as trustee of PLife REIT and master lessor, and Parkway Hospitals Singapore Pte Ltd, a wholly-owned subsidiary of Parkway Holdings Ltd.

       Parkway Holdings is an indirect wholly-owned subsidiary of IHH.

       As part of the extended lease arrangement, IHH said PLife REIT will inject a one-time renewal capital expenditure of up to S$150mil (RM464.8mil) to revamp the Singapore hospitals.

       The injection is intended to enhance the overall performance, operations and architectural design of the existing high quality properties.

       “Utilisation of available space and resources are expected to be improved, allowing the Singapore hospitals to meet patient demand and better serve the community as well as address emerging and evolving healthcare trends, ” according to IHH.

       The revamp is expected to take three years and works are targeted to commence not later than Jan 1, 2023.

       Meanwhile, IHH also announced that the right of first refusal (ROFR) would be granted by a wholly-owned subsidiary of Parkway Holdings to the trustee of PLife REIT over the hospital block of the Mount Elizabeth Novena Hospital development in the event of disposal of the hospital.

       “The grant of the ROFR in respect of a sale, assignment or transfer of its ownership interest (or any part thereof) of the high quality Mount Elizabeth Novena Hospital Property to PLife REIT for a period of 10 years from the date of the ROFR, serves to enhance the acquisition potential of PLife REIT.

       “The entry into the ROFR demonstrates the strong support and alignment of interests, paving the way for potential further collaborations between IHH and PLife REIT, ” it said.