Parkway Life Reit reports 2.1% rise in DPU to 14.08 cents for FY2021

PARKWAY Life Reit reported a 2.1 per cent increase in its distribution per unit (DPU) to a record 14.08 Singapore cents for the financial year ended Dec 31, 2021 despite a small dip in gross revenue.

For the fourth-quarter of FY2021, its DPU was unchanged at 3.57 Singapore cents, the manager of the real estate investment trust (Reit) said in an interim financial statement on Monday (Jan 24).

Distributable income to unitholders stayed at S$21.6 million in Q4 but for FY2021, it rose to S$85.2 million.

Yong Yean Chau, chief executive of the manager, said the uninterrupted growth in distributions to unitholders was "underpinned by greater certainty from the business continuity and sustained rental income stream accrued from the renewal of master lease agreements for our Singapore hospitals".

This was despite a 0.2 per cent year-on-year dip in gross revenue to S$120.7 million in FY2021, largely attributed to the divestment of its P-Life Matsudo property in Japan and the depreciation of the Japanese yen, the manager said.

It added that this was partially offset by revenue contribution from the Japan property acquisitions in December 2020, 2021 and July 2021 as well as higher rent from the Singapore properties.

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Gross revenue in Q4 however inched up 0.1 per cent due to contribution from several nursing home properties and higher rent from the Singapore properties.

Net proceeds from the divestment have been used to repay short term borrowings in Q2.

The group has current loans and borrowings of about S$94.7 million as at Dec 31. Committed long-term facility of 7.7 billion yen (S$91.6 million) has been put in place to extend the current loans and borrowings by March 2022, the reit manager said.

"Notwithstanding the net current liabilities position, based on the Group's existing financial resources, the group believes that it will be able to refinance its borrowings and meet its current obligations as and when they fall due," it said.

For 2022, the manager noted that the global economy is still facing uncertainty, stemming from Omicron, as well as a rise in inflation that could "endanger the recovery" in emerging and developing economies.

"As uncertainties surrounding global economies continue to pose challenges for most businesses, Parkway Life Reit remains prudent as it proactively manages its portfolio and strategically navigates for growth opportunities," said the manager.

"The healthcare industry will remain critically essential in a rapidly ageing population with greater demand for better quality healthcare and aged care services. Parkway Life Reit's assets place it in a good position to benefit from the resilient growth of the healthcare industry in the Asia-Pacific region," it added.

Units of the reit closed 0.4 per cent, 2 cents lower, to end at S$4.94 on Monday.