Home Capital Broker's Calls

This REIT has a defensive lease structure and is also protected from deflation

PC Lee
PC Lee1/26/2017 01:05 PM GMT+08  • 2 min read
This REIT has a defensive lease structure and is also protected from deflation
SINGAPORE (Jan 26): CIMB is maintaining its “add” call for Parkway Life REIT, saying it has one of the most resilient income structures in the local REIT sector, with a deflation-protected Singapore revenue stream and defensive long-term lease structu
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

SINGAPORE (Jan 26): CIMB is maintaining its “add” call for Parkway Life REIT, saying it has one of the most resilient income structures in the local REIT sector, with a deflation-protected Singapore revenue stream and defensive long-term lease structure in Japan.

Meantime, its balance sheet remains strong, with gearing of 36.3% and low 1.4% effective cost of debt, says lead analyst Lock Mun Yee in a Wednesday report. And following the sale of the four Japan assets, Parkway Life REIT intends to distribute the $5.3 million net disposal gain to unitholders in FY17F too.

In 4Q16, Parkway Life REIT reported higher revenue and NPI of $27.7 million and $25.6 million respectively. Better earnings performance by Singapore and Japan nursing homes was partly offset by lower contributions from Malaysia and Japan pharmaceutical due to a one-off marketing commission paid for the renewal of a lease that expired in Dec 16. Reported 4Q/FY16 DPU of 3.06/12.12 cents both declined 9% yoy due to the absence of divestment gains. On like-for-like basis, 4Q/FY16 DPU would have been 2.2%/2.7% higher y-o-y.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.