SINGAPORE (Sept 3): ParkwayLife Real Estate Investment Trust, which counts IHH Healthcare as its sponsor and major unitholder (with a 35.7% stake), stands out among the 40 listed S-REITs. (IHH is 40.4%-owned by Khazanah Nasional, the investment holding arm of the Malaysian government.) For one, it is the largest and most investable healthcare REIT on the Singapore Exchange — and arguably in Asia. Secondly, its main focus is on sustainability of distributions per unit (DPUs), and thirdly, the REIT manager does not have a general mandate to issue units. A general mandate is often seen as a necessary requirement to operate a REIT, but ParkwayLife REIT is doing fine without one. No surprise then that it is trading at the lowest yield among S-REITs, a testament to investor demand.
A recent interview with Yong Yean Chau, CEO of ParkwayLife REIT’s manager, was enlightening. Asset growth is not his major thrust. “About a year after it was listed, we did a strategic review and we [decided] we wanted to be the defensive among the defensives. Our mission is to provide sustainable DPU yield to unitholders and, at the same time, give a modest growth story. This is a two-pronged objective, with sustainability [of DPU] as the key prong.”
