Parkway Life REIT’s 3Q DPU falls 8.8% to 3.06 cents on absence of one-off gain

SINGAPORE (Oct 27): Parkway Life REIT (PLife REIT) has declared a distribution per unit (DPU) of 3.06 cents for 3Q16, 8.8% lower than the 3.36 cents in the same period a year ago.

This was mainly due to the absence of one-off distribution of the S$9.11 million (RM27.36 million) divestment gain which was equally distributed in the four quarters in FY2015.

Gross revenue for the quarter grew 8.2% to S$28.1 million.

The growth was primarily driven by contribution from a nursing home it acquired earlier in March this year; higher rent from the properties in Singapore; and the appreciation of the Japanese Yen.

In particular, Parkway East Hospital’s adjusted hospital revenue for the ninth year lease outperformed its minimum guarantee rent, such that it contributed to the increase in revenue for PLife REIT’s Singapore portfolio.

Net property income grew 8% to S$26.2 million from 3Q15’s S$24.3 million.

As part of its ongoing efforts to strengthen its balance sheet, PLife REIT has termed out all loans due in FY2017 and about 27% of loans due in FY2018 – such that there is no long term debt refinancing needs until 2H18.

The REIT’s gearing stands at 38.2% as of Sept 30.

“While we do expect some challenges in acquisition opportunities in the short to medium term, we continue to remain optimistic about PLife REIT’s prospects in the medium to longer term,” says the CEO of the PLife REIT’s manager, Yong Yean Chau, in a Thursday statement.

While emphasising commitment to improving the performance of the group through a “robust asset enhancement strategy”, he also highlights the “resilience and defensiveness” of the healthcare sector.

Units of PLife REIT closed 0.78% higher at S$2.57 on Wednesday. — theedgemarkets.com.sg