Parkway Life Reit Q2 DPU up 10.3% on higher revenue

CEO of Parkway Life Reit Yong Yean Chau.
CEO of Parkway Life Reit Yong Yean Chau. PHOTO: THE BUSINESS TIMES

SINGAPORE - Parkway Life Reit delivered a 10.3 per cent rise in second quarter distribution per unit (DPU) on the back of revenue growth.

DPU for the three months to June 30 was 3.32 Singapore cents, up from 3.01 cents a year ago, the trust manager said on Tuesday (July 25).

This brought DPU for the first half to 6.60 cents, which was 9.9 per cent higher than 6 cents for the same period in 2016.

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

The divestment gains of S$5.39 million from the exercise are being distributed equally over the four quarters of the financial year ending Dec 31, 2017, the manager Parkway Trust Management noted.

Net property income rose by 1.4 per cent to S$25.9 million, from S$25.5 million a year before.

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

Assets include Mount Elizabeth Hospital and Gleneagles Hospital here, and other facilities in Japan and Malaysia.

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."

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

For the first half, the trust booked a 0.7 per cent year-on-year increase in net property income to S$51 million, with revenue at S$54.6 million - also up by 0.7 per cent from a year ago.