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PLife Reit posts 15.6% rise in distributable income for Q3

Sawayaka Hirakatakan, located at Hirakata City, Osaka Prefecture, one of the seven nursing homes Parkway Life Reit divested.

PARKWAY Life Real Estate Investment Trust (PLife Reit) on Thursday posted a 15.6 per cent year-on-year rise in third-quarter distributable income to S$20.3 million, or a distribution per unit (DPU) of 3.36 Singapore cents.

Without one-time divestment gains from the completion of the asset recycling initiative in March, distributable income from recurring operations grew 2.5 per cent year on year in Q3 2015 to S$18 million.

Gross revenue for the three months as at end September rose 2.5 per cent to S$26 million year on year, primarily due to higher-yielding properties acquired from the asset-recycling initiative and higher rental from the Singapore properties.

Correspondingly, net property income climbed 2.4 per cent to S$24.3 million.

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Any adverse impact from the depreciation of the Japanese yen has been mitigated as PLife Reit has hedged its Japan net income for the next few years, said its manager, Parkway Trust Management Limited.

In this regard, the group has registered a foreign-exchange gain of S$0.7 million for Q3 2015, it added.

"Annualised DPU of 13.44 Singapore cents for Q3 2015 also outperformed Q3 2014 by 15.6 per cent, mainly due to the capital distribution of the S$2.3 million gains arising from the divestment of the seven Japan properties in December 2014 and higher rent from existing properties and asset recycling initiative."

With macro headwinds expected to persist on, the trust further strengthened its balance sheet and eliminated imminent refinancing risk with the terming out of all its debts due in 2016 to guard against potential risks of rising interest rates.

The trust has hedged about 78 per cent of its interest rate exposure. As at end-September, its weighted average debt term to maturity stands at 3.7 years, with a low effective all-in cost of debt of 1.5 per cent.

Gearing remains at a healthy level of 35.8 per cent.

Said Yong Yean Chau, CEO of the manager: "Our robust portfolio fundamentals and sound financial metrics have allowed us to deliver consistent attractive results and rewards to our unitholders. Moving ahead, while we seek to be nimble to market changes, we will continue to build on our successful strategies to enhance our overall value and growth potential in a sustainable way."