The manager of Parkway Life REIT (PLife REIT) has reported a distribution per unit (DPU) of 7.29 cents for the 1HFY2023 ended June, 3.3% higher than the DPU of 7.06 cents in the same period the year before.
The higher DPU was due mainly to the contribution from the five nursing homes in Japan that were acquired in September 2022. Higher rent from the REIT’s Singapore properties also contributed to the DPU growth although this was partly offset by the depreciation of the Japanese yen.
Gross revenue rose by 23.6% y-o-y to $74.4 million from the acquisition of the nursing homes and higher rent while net property income (NPI) rose by 25.1% y-o-y to $70.1 million for the same reasons.
Distributable income to unitholders rose by 3.3% y-o-y to $44.1 million.
Based on the REIT’s closing market price of $3.90 as at June 30, its DPU translates to an annualised distribution yield of 3.74%.
As at June 30, the REIT’s total occupancy stood at 99.7%, with 100% occupancies in its properties in Singapore and Japan and 31% (excluding the carpark) in its medical centre in Malaysia.
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Portfolio weighted average lease expiry (WALE) stood at 16.69 years by gross revenue.
As at June 30, the REIT’s gearing stood at 35.3% with an interest cover ratio of 13.8x.
Amid the macroeconomic volatility, the REIT manager says it has adopted a natural hedge strategy for its Japanese investments in a bid to maintain stable net asset value (NAV) and establishing Japanese yen forward exchange contracts to shield itself against the yen’s volatility. These forward contracts have been put in place till 1QFY2027.
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As at June 30, cash and cash equivalents stood at $32.1 million.
“PLife REIT has delivered a sustained performance of higher distributions for our unitholders. The healthcare industry will remain critically essential in a rapidly aging population with greater demand for better quality healthcare and aged care services. Our portfolio of assets places the group in a good position to benefit from the resilient growth of the healthcare industry in the Asia Pacific region,” says Yong Yean Chau, CEO of the manager.
Unitholders will receive their distributions on Aug 30.
Units in PLife REIT closed at $3.85 on July 25.
