PARKWAY Life Reit : C2PU 0% posted a 2.1 per cent increase in its distribution per unit (DPU) to 14.38 Singapore cents for the full financial year ended Dec 31, 2022, from 14.08 cents in FY2021, as gross revenue and net property income also rose.

Gross revenue for the full year was up 7.7 per cent year on year to S$130 million, from S$120.7 million previously, according to a Friday (Jan 27) bourse filing.

This was primarily due to higher rent from the properties acquired in 2021 and 2022, adjusted hospital revenue for Parkway East Hospital’s 15th year lease outperforming its minimum guaranteed rent and higher rent from the group’s Singapore hospitals under the new master lease agreements, said its manager. This was partially offset by the divestment of P-Life Matsudo in January 2021 and depreciation of the Japanese yen.

The healthcare real estate investment trust (Reit) recorded a net property income (NPI) of S$121.9 million for FY2022, up 9.6 per cent on the year from FY2021, where NPI was S$111.2 million.

Parkway Life Reit also saw increases for the half year ended Dec 31, 2022. Year on year, DPU for H2 FY2022 was up 2.7 per cent to 7.32 Singapore cents, from 7.13 cents in H2 FY2021. Gross revenue gained 14.2 per cent to S$69.8 million from S$61.1 million; and net property income grew 18 per cent to S$65.8 million from S$55.8 million.

Distributable income to unitholders rose 2.1 per cent to S$87 million in FY2022; for the latter half of the year, it was up 2.7 per cent year on year to S$44.3 million. In FY2022, the Reit completed two separate acquisitions of several nursing homes in Japan. This brought its total Japan portfolio footprint to 57 properties, equating to S$758.5 million in value and contributing 39.2 per cent of gross revenue as at end-December.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

On Aug 23, 2022, the renewal term of 20.4 years for the Singapore hospitals commenced. The hospitals, “core revenue contributing assets”, are secured with 100 per cent committed occupancy over the long term, the Reit’s manager said.

As part of the lease renewal arrangement for the Singapore hospitals, Parkway Life Reit will commence the S$150 million renewal capex works at Mount Elizabeth Hospital from January 2023, to be completed by December 2025, it added.

The Reit manager also said in its update that it has jointly kickstarted the S$350 million upgrading of Mount Elizabeth Hospital with IHH Healthcare to “enhance their quality positioning and increase competitiveness”.

In FY2022, the group registered a total net change in fair value of investment properties of S$59.4 million comprising a fair-value loss of S$47.5 million and impact from straight-line rental adjustment and amortisation of right-of-use assets amounting to S$11.9 million.

It attributed the valuation loss to the higher capex for Singapore hospitals as a result of inflation and synchronised regular capex works for Mount Elizabeth Hospital.

The Reit’s gearing remains “optimal” at 36.4 per cent, “well within the regulatory gearing limit of 50 per cent”, its manager said.

Units of the Reit closed 1 per cent or S$0.04 higher at S$4.00 on Friday, before the results were announced.

Commenting on the results, the manager’s chief executive officer Yong Yean Chau said that Parkway Life Reit is well-positioned due to its diversified portfolio of high-quality and yield-accretive properties across Singapore, Malaysia and Japan.

“Helmed by the group’s focused strategy of targeted investment, proactive asset management and strategic asset recycling and development and supported by the group’s strong financial standing, the group is well-positioned to ride the growth of the healthcare sector in the Asia-Pacific region even as it continues to create long-term value for its unitholders,” he said.