Parkway Life Reit posts 1.5% rise in H1 DPU to S$0.0706
Elysia Tan
PARKWAY Life Reit’s distribution per unit (DPU) rose by 1.5 per cent to 7.06 Singapore cents for the first half of FY2022 ended Jun 30, from 6.95 cents a year ago, its manager announced on Monday (Aug 8).
The healthcare real estate investment trust’s (Reit) gross revenue was up 1 per cent to S$60.2 million for the half-year period, from S$59.6 million a year ago.
This was mainly due to bolt-on contribution from the 3 nursing homes it acquired in July and December 2021 and higher rent from the group’s Singapore properties, its manager said, though it added that gains were partially offset by the loss of income from the divestment of a property in January 2021 and depreciation of the Japanese yen.
The Reit owns properties in Singapore, Japan and Malaysia.
Net property income grew 1.1 per cent on the year to S$56.0 million from S$55.5 million in the first half, as a result of a 0.7 per cent increase in property expenses to S$4.1 million.
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 of the its net property income in the half year recorded.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Higher management fees and trust expenses were partially offset by a realised foreign exchange gain amounting to about S$1.3 million from the settlement of yen forward contracts.
Distributable income rose 1.5 per cent year on year to S$42.7 million, from S$42.1 million.
In August 2022, the lease renewal term of 20.4 years — which signifies 100 per cent committed occupancy for the previously-named hospitals — will commence. This will guarantee further rent increases of 2 per cent for the interim period from Aug 23, 2022 to Dec 31, 2022 and 3 per cent for the following 3 years.
The Reit’s manager added that the Reit will inject a one-time renewal capital expenditure of S$150 million to renovate and upgrade the properties, as part of the lease renewal arrangement.
The distribution will be paid out on Sep 12, after books closure on Aug 17.
“Over the years, Parkway Life Reit has been disciplined in strengthening its core fundamentals to ensure sustainable distributions to its unitholders,” said Yong Yean Chau, chief executive officer of the manager.
“The long-term lease renewal of the Singapore hospitals, which will commence on Aug 23, 2022, exemplify such dedicated focus and also the continual efforts of the Reit to foster strong strategic arrangements with its valued partners.”
Units of Parkway Life Reit closed S$0.02 or 0.4 per cent higher at S$4.80 on Monday, before the results were released.
Copyright SPH Media. All rights reserved.
