Parkway Life REIT has reported a distribution per unit (DPU) of 3.84 cents for the 1QFY2025 ended March 31, 1.3% y-o-y from an enlarged unit base. The DPU will be paid out in the REIT&rsquo s 1HFY2025.

 

Distributable income rose by 9.1% y-o-y to $25 million due to the acquisitions conducted in 2024. The higher figure was also attributed to the step-up lease arrangements for the REIT&rsquo s Singapore hospitals.

 

Gross revenue for the quarter increased by 7.3% y-o-y to $39 million due to the contribution from the nursing home acquired in Japan and the 11 nursing homes acquired in France in 2H2024, but was offset by the depreciation of the Japanese yen (JPY). According to the REIT, its principal foreign exchange (forex) risk is mitigated as its acquisitions in Japan are fully funded by JPY loans and a synthetic JPY loan, which provides a natural hedge. Likewise, the REIT mitigates its forex risk for its French portfolio by swapping the Singapore dollar (SGD) proceeds raised to fund the transaction into Euros via the EUR/SGD cross currency swap.

 

As at March 31, the REIT has full occupancy for its Singapore, Japan and France portfolios, while its occupancy rate in Malaysia stood at 31%, unchanged y-o-y. The REIT&rsquo s weighted average lease expiry (WALE) stood at 15.17 years.

 

As at the same period, the REIT&rsquo s gearing stood at 36.1% with an interest coverage ratio of 9.3 times. Its net asset value (NAV) per unit stood at $2.42 as at March 31.

 

Since it was listed on the Singapore Exchange (SGX), the REIT manager points out that the REIT&rsquo s distribution per unit (DPU) has grown steadily at a rate of 136.1% since its initial public offering (IPO). The REIT has also seen uninterrupted recurring DPU growth with total DPU of $2.0457 distributed since it listed.

 

As at March 31, Parkway Life REIT has a portfolio size of $2.46 billion spanning 75 properties and 35 lessees.

The buyer is a wholly owned unit of IHH Healthcare, which is a substantial unitholder of the trust

[SINGAPORE] The manager of Parkway Life Real Estate Investment Trust : C2PU +0.48% (PLife Reit) announced on Monday (Apr 21) that the healthcare Reit is selling freehold strata units and lots of a Malaysian property for RM20.1 million (S$6.1 million).

 

The deal will mark the Reit&rsquo s exit from Malaysia, as the units and lots were its sole investment in the market and contributed only 0.2 per cent to the trust&rsquo s asset value, said the manager in a bourse filing.

 

The strata units and lots are located in MOB Specialist Clinics, within the compound of Gleneagles Hospital Kuala Lumpur. The hospital is owned and operated by integrated healthcare provider IHH Healthcare : Q0F +1.49%, a substantial unitholder of PLife Reit.

 

The purchaser, Pantai Medical Centre, is a wholly owned unit of IHH Healthcare.

 

The units and lots have a floor area of 2,444 square metres and comprise three ground floor units, three medical consulting suite units on the second and seventh floors, the entire eighth floor and 69 carpark lots.

 

The manager noted that the divestment is in line with the manager&rsquo s asset recycling strategy and will strengthen PLife Reit&rsquo s balance sheet.

 

It will also &ldquo provide greater financial flexibility for PLife Reit to seize other attractive investment opportunities offering better value&rdquo , said the manager.

 

The sale consideration is around 25.6 per cent higher than the original purchase price of RM16 million in 2012.

 

It is also 4.6 per cent above the average of the units and lots&rsquo latest valuations of RM19.2 million as at Dec 31, 2024. Independent valuations were carried out by Nawawi Tie Leung Property Consultants and Knight Frank Malaysia.

 

The manager added that a proportion of the sale consideration has been paid by Pantai Medical Centre in cash on Monday, with the remaining to be paid pursuant to terms of the sale and purcahse agreement.

The analyst expects its acquisition in France and in-built rent escalation in Singapore to support DPU growth

MAYBANK Securities has initiated coverage on Parkway Life Real Estate Investment Trust (Reit) with a &ldquo buy&rdquo call and a S$4.10 target price.

 

In a report on Wednesday (Jan 8), analyst Krishna Guha noted that though the stock is expensive, it is defensive given the Reit&rsquo s &ldquo strong record of uninterrupted recurring dividend growth&rdquo . He said: &ldquo While the yield spreads are tight, we view that the attractive attributes and favourable sector or thematic justify the premium valuation.&rdquo

 

The target price is based on 7 per cent cost of equity and 2 per cent medium-term growth rate. The Reit is trading at 1.55 times its price-to-book ratio at its historical mean, and has a tight yield spread of 130 basis points.

 

Guha is also positive about Parkway Life Reit&rsquo s growth strategy and growing distribution profile from lease renewals. He estimates that the Reit&rsquo s distribution per unit for financial years 2024 to 2026 will grow at a compound annual growth rate of 7.2 per cent. This will be backed by in-built rent escalation in Singapore and acquisition in France, he said.

 

In October 2024, Parkway Life Reit purchased 11 nursing homes in France for a total consideration of about 111.2 million euros (S$159.9 million). Its maiden accretive investment helped the Reit to build a third key market besides Singapore and Malaysia, and Japan.

 

The properties will continue to be leased to DomusVi, under a new lease term of 12 years, after the deal goes through. This tie-up is likely to help the Reit scale its presence, said Guha. The analyst also likes the stock for its &ldquo visible revenue and distribution growth&rdquo , following the renewal of the master lease for the Reit&rsquo s Singapore hospitals.

 

Parkway Life Reit&rsquo s five-year journey to the West

 

Guha also believes that Parkway Life Reit is &ldquo well-positioned to capture further growth opportunities&rdquo amid the favourable cost of capital, with a yield of around 4 per cent and a cost of debt at 1.4 per cent.

Trust is marking its first foray into Europe with acquisition of 11 nursing homes in France

SIXTEEN years after it first expanded its portfolio beyond Singapore to Japan, healthcare-focused Parkway Life Real Estate Investment Trust (Reit) : C2PU -0.52% is finally making headway into a third key market.

 

The Reit announced on Tuesday (Oct 22) that it is acquiring 11 nursing homes in France for about 111.2 million euros (S$159.9 million), marking its maiden investment in Europe.

 

The acquisition will be fully funded by a private placement to raise gross proceeds of about S$180 million.

 

On Wednesday, the trust closed its private placement at the issue price of S$3.80 per new unit. This represents the lowest end of the estimated issue price range of between S$3.80 and S$3.88 when the acquisition was first announced.

 

Speaking to The Business Times on Wednesday, chief executive officer of the trust&rsquo s manager Yong Yean Chau said that the manager felt it was &ldquo a very good time&rdquo to enter a third market given that Parkway Life Reit had grown in scale and established itself as a market leader in Japan.

 

The trust, which listed on the Singapore Exchange in 2007 with three hospital properties &ndash Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital (previously East Shore Hospital) &ndash entered the Japan market a year later. It has since grown its portfolio to 64 properties, of which about 60 per cent by gross revenue is in Singapore, and most of the remaining in Japan. The trust also has a stake in a specialist clinic in Malaysia.

 

Level of risk

In considering its third market, Yong said that the manager took into account the level of risk, particularly that of tenancy defaults, that a new market would pose to Parkway Life Reit. The manager also considered the trust&rsquo s ability to scale its growth in the new market.

 

To this end, Europe fits the bill as it has a fast-ageing population and a very developed long-term care sector, said Yong. Healthcare is also a less politically contentious sector in Europe, unlike other emerging countries in Asia-Pacific such as India, Thailand or China, and is less susceptible to risks, he noted.

 

Over the last five years, the Reit manager has been exploring opportunities across various markets in Europe, including bigger economies such as France, the United Kingdom and Germany.

 

While there were potential opportunities during this period, these deals had to be aborted due to various financial concerns, added Yong.

 

That was until the management team met with DomusVi, a nursing home operator in France. &ldquo We think DomusVi fits into what we hope to achieve and is a good partner that we can scale together with over time,&rdquo said Yong.

 

He explained that DomusVi is looking to reduce its assets while growing its operations. At the same time, Parkway Life Reit can establish a foothold and build its credibility in the European market by partnering with DomusVi, which is the third-largest aged care operator in Europe.

 

As for choosing France as its entry point into Europe, Yong assuaged concerns that France&rsquo s reputation for strikes and protests would pose a risk to Parkway Life Reit. He noted that the eldercare sector is mostly shielded from risk, as there is consensus across the political parties that it is a necessary service. Given that eldercare operations in France receive significant government subsidies, there is also &ldquo a good level of stability&rdquo in operators&rsquo income, and by extension, rental revenue for Parkway Life Reit.

 

In terms of portfolio allocation, Yong stressed that Singapore assets will continue to make up the core of its portfolio at around 60 per cent, while the Japan and Europe markets will be maintained at around 30 and 10 per cent, respectively, and help to diversify risks within the portfolio. Hospitals will continue to make up about 60 per cent of the Reit&rsquo s assets, while the remaining will be other long-term care properties and related medical facilities.

 

Rewarding &ldquo sticky&rdquo investors

In light of its foray into Europe, Parkway Life Reit also announced its first equity fundraising since its initial public offering.

 

Loo Hock Leong, chief financial officer of the Reit manager, explained that the manager chose to fully fund the acquisition through equities, rather than a loan, as it would not lower the Reit&rsquo s debt headroom. The acquisition would also remain yield-accretive at 1.6 per cent.

 

Noting that the private placements were oversubscribed, Loo said that the placements were mostly allocated to &ldquo long-term sticky investors&rdquo such as long-only funds, real-estate specific funds as well as blue-chip institutional investors. &ldquo We deliberately allocate more funding towards the longer-term investors because these are the partners that will continue to support and partner us over a longer-term,&rdquo added Yong, the CEO. Introducing new institutional investors also improves the liquidity of Parkway Life Reit&rsquo s shares, he explained.

 

Ultimately, the healthcare-focused Reit&rsquo s foray into Europe is intended to ensure sustainable dividends for unitholders and promote organic growth, noted Yong. &ldquo The intention from here onwards is that we are looking to do more deals. And then, I think, we will be in a good bargaining position to talk to people. We have shown the capability to do deals with one of the top three operators in Europe, and it will help us to grow in Europe.&rdquo

This represents the lowest end of the estimated issue price range

 

PARKWAY Life Real Estate Investment Trust&rsquo s (Parkway Life Reit : C2PU -3.51%) private placement to fund its acquisition of 11 nursing homes in France has closed at the issue price of S$3.80 per new unit.

 

This represents the lowest end of the estimated issue price range of between S$3.80 and S$3.88 per new unit when the acquisition was first announced. 

 

On Wednesday (Oct 23), its manager said the private placement was oversubscribed and drew strong demand from new and existing institutional and accredited investors.

 

Out of the total expected gross proceeds of about S$180 million, the Reit manager intends to use around S$159.9 million &ndash or some 88.8 per cent, to fully fund its proposed acquisition of nursing home assets in France.

 

The remaining S$20.1 million, or about 11.2 per cent, will be used to pay estimated professional and other fees and expenses to be incurred from the private placement and the acquisition.

 

Under the private placement exercise, the Reit will issue nearly 47.4 million new units on or around Nov 1, 2024. Trading of the new units on the Singapore Exchange is expected to commence at 9 am on the same day.

 

Parkway Life Reit&rsquo s policy is to pay out its distributable income on a semi-annual basis to unitholders.

 

Its manager intends to declare an advanced distribution for Jul 1 to the date preceding the day of issue of the new private placement units, at an estimated range of S$0.048 to S$0.052.

 

The issue price of S$3.80 represents a discount of 3.5 per cent to the adjusted volume-weighted average price (VWAP) of S$3.94 per unit, which excludes an estimated advanced distribution of S$0.05 per unit &ndash being the midpoint of the Reit&rsquo s estimated advanced distribution range.

 

The issue price also stands at about 4.7 per cent to the VWAP of S$3.99 per unit for all trades done for the preceding market day on Oct 21, up until the time the placement agreement was signed the following day.

This is the real estate investment trust&rsquo s maiden investment in Europe

 

PARKWAY Life Real Estate Investment Trust (Parkway Life Reit) is acquiring 11 nursing homes in France for a total consideration of 111.2 million euros (S$159.9 million).

 

The acquisition marks the Reit&rsquo s maiden investment in Europe, which is the third key market &ndash besides Singapore and Malaysia, and Japan &ndash with &ldquo strong fundamentals, growing ageing population and aged care sectors&rdquo , said the manager on Tuesday (Oct 22).

 

The purchase price of S$159.9 million represents an approximate 3.6 per cent discount from the properties&rsquo independent valuation of about S$165.8 million.

 

The healthcare-focused Reit is buying the properties from DomusVi, a nursing home operator in France.

 

The properties will continue to be leased to DomusVi, under a new lease term of 12 years, after the deal goes through.

 

The transaction is expected to be completed by the fourth quarter of 2024, after which Parkway Life Reit&rsquo s portfolio will rise to 75 properties with a total value of about S$2.42 billion.

 

The acquisition will be fully funded by a private placement to raise gross proceeds of about S$180 million, at an estimated issue price range of between S$3.80 and S$3.88 per new unit.

 

This price range represents a discount of between about 2.7 and 4.7 per cent to the volume-weighted average price (VWAP) of S$3.99 per unit on the preceding market day, said the manager in a separate announcement.

 

For illustrative purposes, the price range represents a discount of between about 1.5 and 3.5 per cent to the adjusted VWAP of S$3.94 apiece. This is based on trades done on the preceding market day, and excludes an estimated advanced distribution of S$0.05 per unit.

 

About 88.8 per cent, or S$159.9 million, of the proceeds will be used to finance the acquisition.

 

The remaining S$20.1 million, or about 11.2 per cent, will be used to cover the fees and expenses associated with the placement and purchase.

 

The manager will declare an advanced distribution for the period from Jul 1 to the date of the issue of the new units. The quantum of distribution is estimated to be between S$0.048 and S$0.052 per unit.

 

If the acquisition was completed on Jan 1, 2024, and was fully financed by the placement, pro forma distribution per unit (DPU) for the first half of 2024 would stand at S$0.0764, which is 1.4 per cent higher than its actual DPU of S$0.0754.

 

The Reit&rsquo s pro forma net asset value per unit for H1 2024 would be S$0.0246, representing a 4.3 per cent accretion to unitholders.

 

Its pro forma leverage ratio for H1 2024 would also fall roughly to 33.3 per cent, from 35.3 per cent as at Jun 30.

 

The new units are expected to be issued on or around Nov 1.

 

The 11 nursing homes, located across France, comprise a total of 42,630.8 square metres of net lettable floor area and 850 nursing beds.

 

The Reit manager is positive on the strong demand for nursing homes in France, which is facing an ageing population. It noted that the proportion of people aged 65 and above has increased from 17 per cent in 2009 to 22 per cent in 2023.

 

Therefore, it believes that the transaction will allow the Reit to &ldquo capture the structural tailwinds&rdquo of France&rsquo s ageing population.

 

It also expects the deal to provide the Reit a foothold in a &ldquo highly regulated sector with high barriers to entry&rdquo , as no new nursing home beds are expected to be authorised until 2028.

 

The Reit manager also highlighted that France&rsquo s strong governmental support for the nursing-home sector would reduce operational risks.

 

Some 32 per cent of France&rsquo s gross domestic product is allocated to social security outlay, and spending on aged care such as nursing homes accounts for 44 per cent of the country&rsquo s total expenditure, said the manager.

 

Yong Yean Chau, chief executive officer of the manager, said: &ldquo Through this acquisition, Parkway Life Reit will extend (its) growth into a new market with strong fundamentals &ndash ageing population with mature health and aged care sectors.&rdquo

 

He added: &ldquo This will allow Parkway Life Reit to optimise its investment exposure and further diversify the geographical risks within its portfolio, thereby enhancing risk-adjusted returns for its unitholders.&rdquo

Parkway Life REIT has reported gross revenue of $108.5 million for 3QFY2024 ended Sept 30, 2.2% lower y-o-y. This was mainly due to depreciation of Japanese yen, says the REIT manager on Oct 16, partly offset by contribution from the properties acquired in 2023 and 2024. 

 

Net property income for the quarter is 2.1% lower y-o-y, at $102.4 million. 

 

That said, the drop in revenue will be compensated by the foreign exchange gains from the settlement for the forward contracts, says the REIT manager. The REIT reported 2.8% higher distributable income of $538,000 during the quarter from SIngapore hospitals and some Japanese nursing homes with step-up lease arrangements. 

 

The distribution per unit (DPU) for the quarter is 2.8% higher y-o-y at 11.3 cents. As the REIT makes distribution on a semi-annual basis, no distribution is set for 3QFY2024. The DPU of 11.3 cents will form part of the 2HFY2024 distribution when the REIT announces its 2HFY2024 results.

 

As at Sept 30, the REIT&rsquo s committed occupancy stands at 100%, with 64 leases and 34 lessees. 

 

Additionally, the REIT&rsquo s cash and cash equivalent are $37.2 million for 3QFY2024, up from $28.5 million as at end-2023. The REIT&rsquo s investment properties increased in value to $2.3 billion from $2.2 billion as at end-2023. 

 

Net asset value per unit stood at $2.30 at the end of 3QFY2024, down from $2.34 at end-2023. 

 

As at Sept 30, the REIT&rsquo s weighted average debt expiry stood at 3.0 years, which is expected to extend to 3.8 years post term maturing loans due in 2025 and short-term loan drawn down for acquisitions. 

 

Meanwhile, the REIT&rsquo s gearing is at 37.5%. 

 

The REIT has a debt headroom of $321.3 million and $590.1 million before reaching 45% and 50% gearing, respectively.

Parkway Life REIT (PLife REIT) has agreed to acquire a nursing home property in the Osaka Prefecture, HIBISU Higashi Sumiyoshi, for JPY2.45 billion ($20.7 million).

 

PLife REIT&rsquo s trustee, through its wholly-owned subsidiary Parkway Life Japan2 Pte. Ltd., entered into a Tokumei Kumiai agreement with Godo Kaisha SAMURAI 20 (TK operator) in relation to the acquisition of the home. The TK operator entered into a conditional purchase and sale agreement (SPA) with K.K. FDS for the purchase of the property. A Tokumei Kumiai agreement is also known as a silent partnership agreement. The agreement is similar to the holding structure for the REIT&rsquo s previous acquisitions in Japan.

 

The acquisition will be made at around 9.1% below valuation and is expected to be completed by the third quarter in 2024. Upon its completion, PLife REIT will have 60 properties in Japan totalling $676.8 million.

 

The Osaka nursing home was newly built in June this year and has 138 beds. The freehold property is located in the residential area in Osaka City and is Building-Housing Energy-efficiency Labelling System (BELS) certified.

 

The acquisition will see PLife REIT taking over the existing master lease agreement from K.K. FDS. The property&rsquo s lease term of 30 years brings the REIT&rsquo s weighted average lease expiry (WALE) by gross revenue to 16.17 years, from 16.05 years as at June 30.

 

The property was developed by FDS, an established real estate developer in the Kansai region of Japan. The REIT had already transacted with FDS in 2023, making this acquisition the second collaboration between both parties.

 

See also: CapitaLand Ascott Trust to call its 2019 perps, plans to replace with new tranche

 

PLife REIT will also continue to leverage the strategic memorandum of understanding (MOU) it signed with FDS in 2023 to gain access to future pipelines of high-quality assets in Japan.

 

Through the same acquisition, PLife REIT will also be propelling its partnership with an existing tenant &ndash K.K. BISCUSS, a reputable nursing and care service provider that currently operates 22 nursing and, or aged care facilities in Osaka, Hyogo and Kumamoto Prefectures. Of these 22 facilities, two of them are nursing homes owned by the REIT.

 

&ldquo Japan remains a crucial core market for PLife REIT as we drive our next phase of growth. This second collaboration with FDS and BISCUSS strengthens our existing working relations and also signifies PLife REIT as a preferred partner of FDS and BISCUSS. This will allow us to secure a pipeline of quality and new assets in Japan amid increasing competition in the sector,&rdquo says Yong Yean Chau, CEO of the manager.

 

The acquisition will be fully funded by Japanese yen (JPY)-denominated debt. Following the acquisition, PLife REIT&rsquo s leverage ratio will increase to 35.9% from 35.3% as at June 30.

Revenue is down 2.7 per cent at S$72.4 million on currency depreciation

 

PARKWAY Life Real Estate Investment Trust (Reit) posted a 3.5 per cent rise in distribution per unit (DPU) to S$0.0754 for its first half ended Jun 30, from S$0.0729 in H1 2023.

 

The manager of the healthcare-focused Reit on Friday (Jul 26) announced that revenue for the period fell 2.7 per cent to S$72.4 million, from S$74.4 million a year prior. This was due largely to the depreciation of the Japanese yen, and was partially offset by contributions from two nursing homes acquired in October 2023.

 

Net property income fell as well. It was down 2.5 per cent to S$68.4 million in H1 2024, from S$70.1 million in H1 2023.

 

Distributable income rose 3.5 per cent to S$45.6 million in H1 2024, from S$44.1 million in the year-ago period. This was due to contributions from properties with step-up lease arrangements.

 

Non-property expenses fell 11.8 per cent to S$9.4 million in H1 2024, from S$10.6 million in H1 2023. This was largely due to realised foreign exchange gains from the settlement of Japanese yen forward contracts.

 

Parkway Life Reit has put in place Japanese yen forward income hedges until the first quarter of 2029, with about 90 per cent of interest rate exposure hedged. The manager said that the Reit will continue to follow its financial management framework to mitigate refinancing risks, as well as manage exposure to interest rate and currency risks.

 

The weighted average lease expiry for Parkway Life Reit&rsquo s portfolio stands at 16.1 years as at Jun 30.

 

Yong Yean Chau, chief executive officer of the manager, noted that the healthcare industry is becoming &ldquo critically essential in a rapidly ageing population with greater demand for better-quality healthcare and aged care service&rdquo . Amid that environment, Parkway Life Reit will continue to focus on &ldquo driving resilient returns&rdquo , he said.

 

Falls in gross revenue and net property income are due to depreciation of the yen

 

PARKWAY Life Reit : C2PU 0% posted a distribution per unit (DPU) of S$0.0379 for the first quarter of 2024, up 4 per cent from S$0.0365 a year ago.

 

The healthcare real estate investment trust (Reit) pays out distributions semi-annually, and the Q1 DPU will form part of its distribution for the first half of this year.

 

Overall, gross revenue declined 2.7 per cent to S$36.3 million, from S$37.3 million in Q1 2023, its manager said in a Tuesday (Apr 30) bourse filing. Meanwhile, net property income slipped 2.8 per cent to S$34.3 million, from S$35.3 million previously.

 

The falls were mainly due to depreciation of the Japanese yen, said the manager.

 

But it added: &ldquo As the Reit has hedged the net income from Japan, the drop in revenue will be compensated by the FX (foreign exchange) gains from the settlement of the forward contracts.&rdquo

 

It also noted higher distributable income from Singapore hospitals and some Japanese nursing homes with step-up lease arrangements.

 

Finance costs increased 4.4 per cent to S$2.6 million, from S$2.5 million, on the back of capital expenditure (capex), new acquisitions in 2023, and higher interest costs from Singapore dollar and Japanese yen debts, partially offset by the depreciation of the yen.

 

Notwithstanding this, the manager said interest costs on loans drawn down to fund capex have no distribution impact, as they are not subject to deduction when computing distributable income to unitholders.

 

Its balance sheet and capital structure remain &ldquo strong&rdquo , with no long-term debt refinancing needed until March 2025.

 

As at Mar 31, 2024, all-in debt cost was &ldquo low&rdquo at 1.3 per cent, while gearing stood at 36.4 per cent with an interest cover of 11.1 times.

 

On its management of the Reit&rsquo s financial risk, the manager said that prinicpal FX risk is mitigated, as Japanese yen acquisitions are fully funded by yen loans.

 

Income FX risk is mitigated with yen net income hedges in place until Q1 2029, it said, adding that about 91 per cent of its interest rate exposure is hedged.

 

DBS Group Research cut its target price on Parkway Life Real Estate Investment Trust : C2PU -0.28% (Reit) after taking into account higher capital expenditures (capex) for asset enhancement initiatives.

 

In a report released on Thursday (Mar 7), the research team lowered its target to S$4.50 from S$4.80 and maintained its &ldquo buy&rdquo recommendation. This came after DBS raised its risk-free rate to 2.5 per cent and factored in a higher cost of debt for the Reit.

 

The new target implies a potential upside of 27.5 per cent from the counter&rsquo s last trading price of S$3.53 as at 11.46 am on Thursday. Units of Parkway Life Reit were up 0.6 per cent or S$0.02 at the time.

 

&ldquo We continue to like Parkway Life Reit for its strong earnings visibility, which is a positive attribute, especially in the current volatile and uncertain market outlook,&rdquo said analysts Rachel Tan and Derek Tan.

 

The Reit was also noted to be one of Asia-Pacific&rsquo s largest listed healthcare Reits by asset size. It is a &ldquo rare jewel&rdquo among Singapore-listed Reits, offering highly visible, stable and sustainable earnings due to its resilient industry and long leases with downside risk protection.

 

Furthermore, Parkway Life Reit owns three private hospitals in Singapore, making up most of its domestic market share.

 

The research team believes the next stage of growth for the Reit could come from its potential acquisition of Mount Elizabeth Novena Hospital, where it has the right of first refusal, or expanding into a third pillar, despite the uncertain timing.

 

The Reit&rsquo s full-year results for 2023 were in line with expectations. On Feb 1, it posted a 2.7 per cent increase in distribution per unit (DPU) to S$0.1477.

 

Gross revenue was up 13.5 per cent at S$147.5 million, while net property income (NPI) climbed 14.1 per cent to S$139.1 million.

 

For the six months ended Dec 31, 2023, the Reit recorded a 2.1 per cent rise in DPU to S$0.0748. Acquisitions helped boost H2 gross revenue by 4.7 per cent to S$73.1 million. Accordingly, NPI was up 4.8 per cent at S$69 million.

On Feb 5, Cohen & Steers Capital Management increased its substantial shareholding in (PLife Reit) to back above the 6 per cent threshold. The 2,355,900 units were acquired an average price of S$3.48 per unit. The deemed interest was previously above the 6 per cent threshold, but fell below 6 per cent, following a disposal of 3,777,771 units on Jan 3 at an average price of S$3.70. Note that Cohen & Steers Capital Management is not the registered holder of any shares of PLife Reit.

 

PLife Reit owns a diversified portfolio of 63 properties located in the Asia-Pacific region, with a total portfolio size of approximately S$2.23 billion as of Dec 31, 2023. This includes the largest portfolio of strategically located private hospitals in Singapore comprising Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital.

 

On Feb 1, Parkway Trust Management reported PLife Reit achieved a net property income of S$69 million for H2 FY23 (ended Dec 31). This an increase of 4.8 per cent from H2 FY22, and for its FY23, net property income amounted to S$139.1 million, which was up 14.1 per cent from FY22. During its FY23, PLife Reit fortified its presence in Japan&rsquo s aged care market with the acquisition of two new nursing homes in Osaka Prefecture.

 

These yield-accretive acquisitions marked the initiation of a new strategic partnership with K.K. FDS, an established real estate developer in Japan. At the same time the partnership has enhanced PLife Reit&rsquo s tenant diversification with a new operator and brings the Group&rsquo s total Japan portfolio footprint to 59 properties aggregating to S$717.24 million in value.

RECENT acquisitions of nursing homes lifted Parkway Life Reit : C2PU -0.57%&rsquo s distribution per unit (DPU) by 2.1 per cent to 7.48 cents, for the six months ended Dec 31, 2023.

 

The Reit&rsquo s acquisition of five nursing homes in September 2022, and two more in Osaka, Japan in October 2023, helped boost H2 gross revenue by 4.7 per cent to S$73.1 million.

 

The Reit &ndash which has 63 healthcare properties in Singapore, Japan and Malaysia &ndash also enjoyed higher rent from its Singapore properties, under new master lease agreements that commenced in August 2022.

 

With the top line increase, Parkway Life Reit&rsquo s H2 net property income (NPI) was up 4.8 per cent to S$69 million.

 

For the full FY2023, Parkway Life Reit&rsquo s DPU was up 2.7 per cent to 14.77 cents. Gross revenue rose 13.5 per cent to S$147.5 million, while NPI climbed 14.1 per cent to S$139.1 million.

 

The Reit&rsquo s total portfolio size stood at S$2.23 billion as at end-2023, and it sees itself being &ldquo in a good position to benefit from the resilient growth of the healthcare industry in the Asia-Pacific region&rdquo .

 

On the debt front, Parkway Life Reit&rsquo s gearing stands at 35.6 per cent. It has no immediate long-term debt refinancing needs till March 2025 the Reit had acquired six committed and long-term new facilities, comprising a mix of Singapore dollar and Japanese Yen loans.

 

The loan proceeds will be used to finance renewal capex works at Mount Elizabeth Hospital, refinance loans due in 2024 and 2025, and term out the short-term loan drawn down upon for the Japan acquisitions.