Parkway Life Reit's DPU rises on higher revenue

Parkway Life Reit's assets include Gleneagles Hospital. The trust manager said its hospitals here are set to enjoy a 1.27 per cent increase in "minimum guaranteed rent" from Aug 23 this year to Aug 22 next year.
Parkway Life Reit's assets include Gleneagles Hospital. The trust manager said its hospitals here are set to enjoy a 1.27 per cent increase in "minimum guaranteed rent" from Aug 23 this year to Aug 22 next year.ST PHOTO: MARK CHEONG

Higher rent, divestment gains push Q2 DPU up to 3.32 cents

Higher revenue sent distribution per unit (DPU) up 10.3 per cent at Parkway Life Reit in the second quarter.

DPU for the three months to June 30 came in at 3.32 Singapore cents, up from 3.01 cents a year earlier, the trust manager said yesterday.

This brought DPU for the first half to 6.6 cents, 9.9 per cent up on the six cents paid out in 2016.

Second-quarter revenue rose 1.1 per cent to $27.7 million, propelled by higher rent from properties in Singapore and contributions from the asset recycling exercise completed in February.

The divestment gains of $5.39 million reaped from the sale of four properties in Japan are being distributed equally over the four quarters of the financial year ending Dec 31, the manager Parkway Trust Management noted.

Net property income rose 1.4 per cent to $25.9 million.

"The gain in net property income is largely driven by the rent contribution from properties acquired in the first quarter of 2017 and the upward minimum guaranteed rent revision of the Singapore hospital properties," the trust manager said.

Parkway Life Reit's portfolio comprises 49 properties - used mainly for healthcare and healthcare-related purposes - valued at $1.7 billion as at June 30.

The assets include Mount Elizabeth, Gleneagles and Parkway East hospitals here and nursing homes in Japan and medical centre units in Malaysia.

  • AT A GLANCE 

  • GROSS REVENUE: 

    $27.7 million (+1.1%) 

    NET PROPERTY INCOME: 

    $25.9 million (+1.4%) 

    DISTRIBUTION PER UNIT: 

    3.32 cents (+10.3%)

The trust manager said its hospitals here are set to enjoy a 1.27 per cent increase in "minimum guaranteed rent" for the lease term from Aug 23 this year to Aug 22 next year, owing to a pick-up in the consumer price index.

Quarterly earnings per unit improved to 3.16 cents from 2.41 cents a year earlier while net asset value per unit was unchanged from December 2016 at $1.72 as at June 30.

The trust booked a 0.7 per cent year-on-year increase in net property income to $51 million for the half-year with revenue also up 0.7 per cent, to $54.6 million.

Its gearing was 37.4 per cent as at June 30, well within the 45 per cent limit allowed for Reits here.

Mr Yong Yean Chau, chief executive of the trust manager, said: "With global interest rates set to rise, we are taking proactive steps to manage our cost of debt and spread our debt maturity profile.

"With prudent capital and risk management strategies, our interest rate exposure has been largely hedged, insulating us from any related headwinds."

Parkway Life units closed up nine cents at $2.76 yesterday after the results were announced.

A version of this article appeared in the print edition of The Straits Times on July 26, 2017, with the headline 'Parkway Life Reit's DPU rises on higher revenue'. Print Edition | Subscribe