Parkway Life Reit sees 9.6% rise in Q1 DPU

Sawayaka Hirakatakan, located at Hirakata City, Osaka Prefecture, one of the seven nursing homes Parkway Life Reit divested.
Sawayaka Hirakatakan, located at Hirakata City, Osaka Prefecture, one of the seven nursing homes Parkway Life Reit divested.PHOTO: PARKWAY LIFE REIT

SINGAPORE - Parkway Life Real Estate Investment Trust announced on Tuesday (April 25) a 9.6 per cent rise in distribution per unit for the second quarter to 3.28 Singapore cents, from 2.99 cents in the corresponding period a year ago

The healthcare Reit's manager said that despite the divestment of four Japan nursing homes in December 2016, DPU from its recurring operations continued to grow by 2.2 per cent to 3.06 cents in the quarter. The gain from the divestment will be equally distributed over the four quarters of the current financial year ending Dec 31, 2017, with a payout of 0.22 cents for the first quarter.

Despite the divestment, PLife Reit's first quarter gross revenue came in at S$26.9 million, almost the same as a year ago, underpinned by the contribution from a nursing home acquisition in March 2016, higher rent from the Singapore properties and the appreciation of the Japanese yen.

Following the completed acquisition of the five Japan properties on Feb 24, 2017, the new properties started contributing to group revenue in the first quarter. Correspondingly, net property income for the quarter stood at S$25.1 millio, steady with last year.

The Reit's manager said that all of its long-term loans which were due in financial year 2018 had been successfully termed out in the first quarter of 2017 as part of the group's ongoing efforts to strengthen its balance sheet. There will be no long-term refinancing need till FY2019.

PLife Reit also completed its second asset recycling initiative as it redeployed the freed up capital from the divestment of its four Japan properties to acquire five Japan properties at 4.76 billion yen (approximately S$59.5 million). The manager said that by divesting its less strategic assets and acquiring better assets at more accretive yield level, the move unlocked value for PLife Reit as it strengthen the quality of its Japan portfolio.

Said Mr Yong Yean Chau, CEO of the Reit's manager: "Our rejuvenated portfolio of assets following the second asset recycling and reinforced capital structure has strengthened our foundation as we look forward to delivering further growth in the year ahead."