Parkway Life Real Estate Investment Trust (PLife Reit) yesterday reported an 8.8 per cent fall in distribution per unit (DPU) to 3.06 cents for the three months to Sept 30 from 3.36 cents in the same period last year, due to the absence of a one-off divestment gain.

DPU from recurring operations, however, continued to grow, rising 2.7 per cent year on year in the third quarter.

Gross revenue for the quarter rose by 8.2 per cent to $28.1 million, mainly due to contribution from a nursing home acquired on March 31, higher rent from properties in Singapore and the appreciation of the Japanese yen.

Net property income rose by 8 per cent to $26.2 million.

Following the completion of the asset enhancement initiative (AEI) of Sawayaka Kiyotakan in Japan, rent is expected to increase by 4.7 per cent for the remaining lease term of about 17 years with effect from July 26.

This is the ninth AEI for the group's Japan portfolio and fourth AEI with its largest nursing home operator, KK Sawayaka Club.

"We are committed to improving the performance of the group through a robust asset enhancement strategy. Since listing, we have devoted substantial effort to implementing asset enhancement initiatives with the aim of unlocking the value of our properties and developing them to their full potential," said Mr Yong Yean Chau, chief executive of the Reit manager.

As part of ongoing efforts to strengthen its balance sheet, PLife Reit has reconfigured all loans due next year and about 27 per cent of loans due in 2018.

With that, there is no long-term debt refinancing needs till the second half of 2018.

The current effective all-in cost of debt stands at 1.4 per cent.

Gearing remains healthy at 38.2 per cent, well within the 45 per cent limit allowed.

"This has been a tough year for the economy as investors are faced with uncertain market conditions and increased volatility," said Mr Yong.

"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," he added.

Parkway Life units ended one cent lower at $2.56.