Early today, Parkway Life REIT (SGX: C2PU) reported its 2018 third-quarter earnings update. The real estate investment trust (REIT) posted a higher distribution per unit (DPU), excluding divestment gains from a year ago.
As a quick introduction, Parkway Life REIT is one of the largest listed healthcare REITs in Asia by asset size. The Singapore-based REIT has ownership over three private hospital properties locally and holds stakes in 46 healthcare-related assets in Japan. It also has strata-titled units/lots in Gleneagles Intan Medical Centre in Malaysia.
With that out of the way, let’s look at nine things that investors should know about the REIT’s latest result.
- For the quarter, gross revenue grew 2.5% to S$ 28.4 million while net property income (NPI) improved by 2.5% to S$ 26.5 million, compared to the same period last year.
- Yet, distribution per unit (DPU) declined 4.1% year-on-year to 3.23 cents. Excluding one-off distribution of divestment gain last year, DPU would have increased by 2.7%.
- Based on Parkway Life REIT’s annualized DPU of 12.79 cents and its current price of S$2.65 (as of writing), the REIT has a trailing distribution yield of 4.8%.
- As of 30 September 2018, the REIT’s gearing stood at 37.7%, which is a safe distance from the regulatory ceiling of 45%.
- The REIT’s latest reported occupancy rate stood at 99.97%.
- The weighted average lease expiry profile (by gross revenue) was 7.31 years.
- Geographically, Singapore, Japan and others accounted for 60.5%, 39.1% and 0.4%, respectively, of gross revenue.
- Parkway East Hospital’s adjusted hospital revenue for the 11th year lease (23 August 2017 to 22 August 2018) increased 1.27%, above its minimum guaranteed rent of 1%.
- Looking ahead, Yong Yean Chau, Chief Executive Officer of the Manager, commented:
“We remain committed in preserving the resiliency of our earnings within this environment of rising interest rates and market uncertainties. In the past quarter, we have successfully refinanced all loans due in 2019 as part of our liquidity risk management strategy and continued to manage our exposure to interest rate and foreign currency risks. This has been done to enhance the defensiveness of PLife REIT’s balance sheet, to safeguard the stability and resiliency of our distributions to Unitholders.”
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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.