Parkway Life Reit posts 0.7% rise in Q2 DPU to 3.38 S cents

PARKWAY Life Real Estate Investment Trust (Parkway Life Reit C2PU ) on Tuesday posted a 0.7 per cent rise in distribution per unit (DPU) to 3.38 Singapore cents for the second quarter ended June 30, 2021, from 3.36 cents the year before.

Annualised DPU for Q2 was 13.52 cents, up 0.7 per cent from 13.44 cents the previous year.

In its regulatory filing on Tuesday, the Reit's manager attributed this to contribution from the existing portfolio and the absence of one-off Covid-19-related relief measures that were provided to tenants a year ago.

However, gross revenue for Q2 fell by 2.3 per cent to S$29.6 million, from S$30.3 million a year ago.

The Reit's manager said this was due to the loss of income from divested property and depreciation of the Japanese yen.

Net property income (NPI) also fell by 2.8 per cent to S$27.4 million for the same period, from S$28.2 million the year before.

Distribution income for the quarter ended June 30, 2021 rose by 0.7 per cent to S$20.5 million, from S$20.3 million the previous year.

The Q2 2021 distribution will be paid out on Aug 31, after books closure on Aug 4.

Meanwhile, for the half year ended June 30, 2021, the Reit posted a 4 per cent rise in DPU to 6.95 cents, from 6.68 cents the year before and distributable income rose by 4 per cent to S$42.1 million. Gross revenue was down 1 per cent to S$59.6 million for the same period, while NPI eased 0.9 per cent to S$55.5 million.

To strengthen its growth potential and income sustainability, Parkway Life Reit's manager noted that the new master lease agreements it earlier entered into with Parkway Hospitals Singapore on July 14 will have an extended term of about 20.4 years, and increase its weighted average lease to expiry by gross revenue from 5.7 years to 16.6 years.

Furthermore, the Reit manager noted that the minimum guaranteed rent for Singapore hospitals will increase by nearly 1.7 per cent for the lease term commencing from Aug 23, 2021 to Aug 22, 2022, underpinned by its rental revision formula at the Singapore hospitals, and will serve to provide sustained organic growth and rental income stream for the Reit.

Its hospital properties in Singapore accounted for 59.5 per cent of its gross revenue as at June 30.

As for its properties in Japan, Parkway Life Reit announced the implementation of its third asset recycling initiative on June 30. This was done through the divestment of its non-core property, P-Life Matsudo, at a sale yield of 4.3 per cent, with the proceeds going towards the acquisition of two nursing homes at higher property yield of 5.7 per cent.

Units of the Reit closed down 0.64 per cent or S$0.03 to close at S$4.69 on Tuesday.