Parkway Life Reit net property income up 0.1% in Q3

Vivienne Tay

Published Tue, Nov 1, 2022 · 08:45 AM

Gross revenue is down 1.3 per cent to S$89 million in the same period. PHOTO: ALPHONSUS CHERN, ST

PARKWAY Life Reit on Tuesday (Nov 1) posted a 0.1 per cent rise in net property income to S$82.8 million in its third quarter ended Sep 30, from S$82.7 million in the same period a year ago.

Gross revenue, meanwhile, was down 1.3 per cent to S$89 million, weighed by the depreciation of the Japanese yen and loss of income from the divestment of a non-core asset in 2021, according to a business update. In Q3 2021, gross revenue stood at S$90.1 million.

The drop in gross revenue was partially offset by contributions from three properties acquired in 2021 and five properties acquired in 2022, along with higher rent from Singapore hospitals.

As the real estate investment trust (Reit) hedged net income from Japan, the drop in revenue will be compensated by foreign exchange (FX) gains from the settlements of the forward contracts, the manager said.

Principal FX risk has been mitigated as its Japan acquisitions are fully funded by loans denominated in yen. Income FX risks, meanwhile, have been mitigated with yen net income hedges in place until Q1 2027. Around 73 per cent of interest rate exposure is hedged.

Parkway Life Reit’s gearing stood at 34.7 per cent as at end-September. The manager added that there are no long-term debt refinancing needs until June 2023.

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There were 23 primary-listed stocks conducting share buybacks over the 5 sessions ended Sep 29, with a total consideration of S$66 million, up from the preceding week’s S$48 million.

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Ascendas Reit spent S$1.2 billion in the first quarter acquiring 11 data centres in Europe and 1-5 Thomas Holt Drive in Sydney’s Macquarie Park. Acquisitions are an effective way to grow Reits' DPU.

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Japan's ageing population is driving demand for quality care homes, says Yong Yean Chau, the chief executive officer of PLife Reit's manager.

Parkway Life Reit to buy 2 Japan nursing homes

Post-nursing home acquisition, Parkway Life Reit’s Japan portfolio would be expanded to S$725.3 million, which makes up around 32 per cent of its total assets under management (AUM), noted analyst Lock Mun Yee.

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Japan’s aged care market remains stable, said Yong Yean Chau, the chief executive officer of PLife Reit's manager.

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The Reit’s Singapore properties - comprising Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital - are its key assets, contributing approximately 60.6 per cent of its net property income in the half year recorded.

Parkway Life Reit posts 1.5% rise in H1 DPU to S$0.0706

First Reit’s Indonesia hospital operator, PT Siloam International Hospitals Tbk reported stable quarter-on-quarter performance for Q1 2022 despite the impact of the Omicron variant.

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The counter closed 2.6 per cent or S$0.10 higher at S$4 on Monday.

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