Last Friday, Parkway Life REIT (SGX: C2PU) reported its 2019 first-quarter (Q1 FY19) earnings. As a quick introduction, Parkway Life REIT is one of the largest listed healthcare real estate investment trusts (REITs) in Asia, by asset size.
The 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.
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Here, we look at nine things that investors should know about its latest result.
- In the latest quarter, gross revenue grew 2.1% to S$28.4 million while net property income (NPI) improved by 2.2% to S$26.5 million, respectively, as compared to the same period last year.
- Similarly, distribution per unit (DPU) was up by 3.5% as compared to the same period last year to 3.28 Singapore cents.
- Based on Parkway Life REIT’s annualised DPU of 13.12 cents and its closing price of S$2.90 (as of writing), the REIT has a trailing distribution yield of 4.5%.
- As of 31 March 2019, the REIT’s gearing stood at 36.4%, which is a safe distance from the regulatory ceiling of 45%.
- The REIT’s occupancy rate stood at 100% at the end of the quarter.
- The weighted average lease expiry (WALE) profile (by gross revenue) was at 6.85 years.
- Geographically, Singapore, Japan, and others accounted for 60.2%, 39.6% and 0.2% respectively, of gross revenue.
- Parkway Life’s minimum guaranteed rent for its Singapore hospitals increased 1.38% for the 12th year of lease term that commenced on 23rd August 2018.
- Yong Yean Chau, Chief Executive Officer of the Manager, commented:
“We are pleased with the positive start for the year for PLife REIT. We have continued to grow our DPU achieving stable returns for our Unitholders even amid uncertain market conditions. In addition, we have bolstered our capital structure by pro-actively refinancing our JPY loans, optimising our debt profile and cost of borrowings.
Notwithstanding that PLife REIT is well-positioned to benefit from the resilient growth of the healthcare industry, we remain cautious and vigilant given the macroeconomic uncertainties and will continue to be prudent in managing financial risks. We will also continue to pursue strategic opportunities for PLife REIT to deliver sustainable, long-term growth for our 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.