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3 Things That Parkway Life REIT’s Management Wants You To Know About Its Business

Parkway Life REIT (SGX: C2PU) is one of the largest listed healthcare real estate investment trusts (REITs) in Asia by asset size.

The manager of Parkway Life REIT had given a presentation on the REIT’s latest results. In the presentation deck, I saw three slides on the REIT’s business that I think investors should pay attention to.

Latest results

Source: Parkway Life REIT Presentation

The above is a quick overview of Parkway Life REIT’s latest results. Overall, the REIT delivered a mixed performance for the quarter.

On the positive side, net property income was higher on a year-on-year basis due to contribution from one nursing rehabilitation facility acquired in February 2018 and higher rent from the Singapore properties. Yet, distribution per unit (DPU) declined 4.1% as compared to the same period last year to 3.23 cents. Excluding one-off distribution of divestment gains last year, DPU would have increased by 2.7%.

Breakdown of gross revenue

Source: Parkway Life REIT Presentation

The above is a quick breakdown of Parkway Life’s gross revenue for the latest quarter.

What we can see from above is that Singapore and Japan accounted for about 60% and 40% of the gross revenue. Both segments saw higher revenue as compared to the same period last year. The former was driven by higher rental income while the latter was due acquisition of a new nursing facility.

Gearing

Source: Parkway Life REIT Presentation

The above is a slide showing the gearing level for Parkway Life REIT as of 30 September 2018.

The existing gearing level of 37.7% is at a safe distance from the regulatory ceiling of 45%. As such, this gives the REIT room to borrow more money for future acquisition. To put the above into perspective, Parkway Life REIT can raise up to S$240.8 million for future acquisitions before the need to raise new equity capital.

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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.