Parkway Life Reit’s 9-month DPU up 2.8% at S$0.1099

PARKWAY Life Real Estate Investment Trust’s (Parkway Life Reit) distribution per unit (DPU) for the first nine months of the fiscal year came in at S$0.1099, up 2.8 per cent on the year from S$0.107.

On Wednesday (Nov 1), its manager said this is inclusive of a third-quarter DPU of S$0.037, which will form part of the H2 distribution when the Reit announces its full-year results.

Certain distribution adjustments were taken into consideration to arrive at the Q3 DPU, with these adjustments subject to a further tax review during the period of distribution.

Net property income (NPI) for 9M ended September was S$104.5 million, up 26.2 per cent on the year from S$82.8 million, while gross revenue rose 24.6 per cent to S$110.9 million from S$89 million a year prior.

Both increases were attributed to contributions from five nursing homes which the Reit acquired in September 2022, as well as higher rent from its Singapore properties under new master lease agreements.

In line with the higher NPI and Parkway Life Reit’s enlarged portfolio, trust expenses rose 6.4 per cent to S$13.3 million from S$12.5 million in the same period a year earlier.

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Finance costs more than doubled to S$7.7 million from S$3.7 million in 9M FY2022, due to the funding of capital expenditure (capex) as well as new acquisitions in 2022. This was coupled with higher interest costs from Singapore-dollar debts, which were partially offset by the depreciation of the yen.

Notwithstanding this, the manager said interest costs on loans drawn down to fund capex have no distribution impact, as they are not subject to deduction when computing distributable income to unitholders.

There is no distribution impact from the net change in fair value of investment properties as well, which widened to S$20.5 million from S$1.3 million a year prior. The movement was due to straight-line rental adjustments under the Reit’s step-up lease arrangement for its Singapore properties, which commenced in August 2022.

As at end-September, Parkway Life Reit’s gearing stood at 36 per cent with an interest cover of 12.8 times.

The manager said it has no long-term debt refinancing needs until March 2024, with a debt headroom of S$372.9 million before the Reit’s gearing reaches 45 per cent. Its debt headroom before reaching a 50 per cent gearing level stood at S$638.9 million.

Units of Parkway Life Reit : C2PU 0% ended Wednesday down S$0.01 or 0.3 per cent at S$3.35.