Parkway Life Reit Q2 DPU up 15.6%

Mr Yong Yean Chau, chief executive officer of the Reit manager.
Mr Yong Yean Chau, chief executive officer of the Reit manager.PHOTO: BUSINESS TIMES

SINGAPORE - Mainboard-listed Parkway Life Reit announced on Tuesday a 15.6 per cent rise in distribution per unit (DPU) to 3.35 cents for the second quarter ended June 30, 2015, from 2.90 for the year-ago period.

Income available for distribution grew a corresponding 15.6 per cent to $20.27 million from $17.54 million a year ago.

Said Mr Yong Yean Chau, chief executive officer of the Reit manager, said: "We are pleased to report that the Reit has once again delivered another record high DPU for 2Q 2015. The completion of our maiden asset recycling has boosted our revenue, contributing to our healthy and steadfast DPU growth that has grown at a rate of 82.3 per cent since our IPO in 2007."

For the first half-year, DPU grew 14.8 per cent year-on year to 6.56 cents, mainly due to the partial capital distribution of the gains arising from the divestment of seven properties in Japan in December 2014 and higher rent from existing properties.

Gross revenue for the second quarter rose 1.2 per cent to $25.6 million as the completion of the asset recycling initiative in March 2015 resulted in a full quarter rental contribution from seven new properties. The higher rental income was able to offset the loss in income from the divestment of seven assets that were of less strategic value.

Net property income for the secnd quarter edged up 1.5 per cent to $24.0 million from the year-ago period.

Bolstered by robust demand for nursing homes in Japan and growing healthcare industry in the region, the healthcare sector remains resilient, the Reit's manager said.

"As a first mover and entrenched player in the Japan market, we plan to consolidate our assets in Japan to generate operating synergies and achieve greater cost savings," said Mr Yong.

He added: "As one of the largest healthcare REITs in Asia, we are actively seeking new opportunities in other regional market to meet the growing demand."

As at end-June, the Reit owns 47 healthcare and related assets worth approximately $1.6 billion.

In Singapore, this incudes Mount Elizabeth Hospital, Gleneagles Hospital, and Parkway East Hospital. The minimum guaranteed rent for its Singapore hospitals will increase by 1.05 per cent from August 23, 2015, to August 22, 2016.

In Japan, it owns one pharmaceutical product distributing and manufacturing facility in Chiba Prefecture, as well as 42 nursing home and care facility properties. It also owns strata titled units in Gleneagles Intan Medical Centre in Kuala Lumpur.