SINGAPORE (Nov 9): The manager of Parkway Life Real Estate Investment Trust reported today a Distribution per Unit (DPU) of 3.37 cents for 3Q17, up 10.1% from 3.06 cents last year.
Excluding the distribution of one-time divestment gains from the divestment of four Japan properties, DPU growth from recurring operations registered a steady increase of 2.8% for 3Q17.
In addition, Parkway East Hospital’s adjusted hospital revenue for the 10th year lease has outperformed its minimum guaranteed rent, attributing to the increase in 3Q17 DPU.
Gains from higher rent received from the Singapore properties and contributions from the asset recycling exercise were offset by the depreciation of the Japanese Yen. As a result, Parkway Life REIT saw a slight decline in gross revenue by 1.4% to $27.7 million for 3Q17.
After deducting property expenses, net property income stood at $25.9 million for 3Q17, which was $0.3 million lower than 3Q16.
In 3Q17, Parkway Life REIT completed two Asset Enhancement Initiatives at a total cost outlay of JPY 11 million ($0.13 million) for its newly acquired Japan nursing home properties, Sanko and Kikuya Warakuen.
Notwithstanding a lower net property income, PLife REIT registered higher distributable income to unitholders from recurring operations mainly due to financing cost savings arising from the refinancing initiatives completed in 2016 and 2017.
Parkway Trust Management says its JPY net income hedges are extended for another two years from 2020, thereby providing a 100% shield against currency volatility till 1Q 2022.
As at Sept 30, gearing remains optimal at 37.3% with a low effective all-in cost of debt of 1.1% and no long-term debt refinancing needs till 2019.
Units of Parkway Life REIT are up 1 cent at $2.89 on Wednesday.