CFA Society Singapore
SINGAPORE (Apr 30): The manager of Parkway Life REIT (PLife REIT) has declared a 1Q18 distribution per unit (DPU) of 3.17 cents, down 3.4% from its 1Q17 DPU of 3.28 cents due to the absence of a one-off distribution of divestment gain in the previous year.
This translates to a 3.4% lower annualised DPU of 12.68 cents compared to 13.12 cents a year ago, as well as an annualised distribution yield of 4.53% based on the REIT’s Mar 29 closing price of $2.80, which is also 3.4% lower from the annualised distribution yield of 4.69% in 1Q17.
Excluding the one-off, DPU from the group’s recurring operations, which refers to the net of amount retained for capital expenditure, grew 3.6% to 3.17 cents over the quarter from 3.06 cents a year ago.
Revenue for the quarter grew 3.2% on-year to $27.8 million, mainly on additional rental contributions from properties acquired in 1Q17 and 1Q18 as well as upward minimum guarantee rent revision of Singapore hospitals by 1.27%.
Correspondingly, net property income (NPI) for the period increased by 3.3% on-year to $26 million from $25.1 million previously.
In its outlook, PLife REIT’s manager says the long-term outlook of the industry continues to be driven by favourable patient demographics and demand for better quality healthcare and aged care services.
Following its recent acquisition of an elderly nursing rehabilitation facility in Japan, the trust now has 50 properties which it believes places the portfolio in a good position to benefit from the growth of Asia Pacific’s healthcare industry.
Furthermore, the manager says its prudent risk management strategy to manage the exposure to interest rate risk and foreign currency risk strengthens the REIT’s resiliency against potential interest rate hikes.
“This has been a positive start for the year for PLife REIT. Recurrent DPU has continued to grow, on the back of favourable rental lease structures, which ensures steady rental growth whilst protecting revenue downside, amid uncertain market conditions,” says Yong Yean Chau, CEO of the manager.
Units in PLife REIT closed flat at $2.79 on Monday.