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Key Highlights From Parkway Life REIT’s 2018 Second-Quarter Earnings

Last week, Parkway Life REIT (SGX: C2PU) reported its 2018 second-quarter (Q2 FY18) earnings. The healthcare real estate investment trust (REIT) has ownership over three private hospital properties in Singapore and holds stakes in 46 healthcare-related assets in Japan. It also has strata-titled units/lots in Gleneagles Intan Medical Centre in Malaysia.

Here, let’s look at eight things that investors should know from the latest results:

1. For the quarter, gross revenue grew 1.3% to S$28.1 million while net property income improved by 1.2% to S$26.2 million, as compared to the same period last year.

2. However, distribution per unit (DPU) declined by 3.7% as compared to the same period last year to 3.19 cents. Excluding one-off distribution of divestment gain last year, DPU would have increased by 3.6%.

3. Based on Parkway Life REIT’s annualised DPU of 12.72 cents and its closing unit price of S$2.77 as of 27 July 2018, the REIT has a trailing distribution yield of 4.6%.

4. As of 30 June 2018, the REIT’s gearing stood at 38.1%, which is a safe distance from the regulatory ceiling of 45%.

5. The REIT’s latest occupancy rate was 100%, as of 30 June 2018.

6. The weighted average lease expiry profile (by gross revenue) was at 7.90 years.

7. Geographically, gross revenue from Singapore, Japan and others accounted for 59.6%, 40.0% and 0.4% respectively.

8. Yong Yean Chau, chief executive of the REIT’s manager, commented on the latest performance:

“For the first half of 2018, PLife REIT continues to deliver stable results. Recognising the importance of staying well prepared in an environment of continual uncertainties and rising interest rates, we embarked on various key finance initiatives such as the 6-Year JPY 3.5 billion Notes Issue and extension of JPY income hedges, to provide the REIT with greater certainty in dealing with its interest rate and foreign exchange exposures as well as to further optimise its average term to maturity and cost of borrowings. Our consistent disciplined approach coupled with the defensive lease structures of our diversified portfolio have filtered down to strong and sustainable DPU growth from recurring operations for PLife REIT.

With a focus on delivering sustainable, long-term growth for our Unitholders, we continue to pursue strategic opportunities to drive value for PLife REIT.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has a recommendation for Parkway Life REIT.