Parkway Life, currently one of Asia's largest Healthcare REIT, has registered a higher net property income of S$21.5 million for its 1Q 2013. This comes on the back of higher gross revenue of S$23.0 million collected during the period.

These numbers represent a marginal increase of 1.8 percent and 1.1 percent for net property income and gross revenue respectively as compared to the same quarter from 2012.

Parkway Life REIT currently has healthcare properties across Japan, Singapore and Malaysia.

Parkway Life (PLife REIT) (SGX:C2PU) has attributed the slightly better performance for the period to higher rents from its Singapore properties and full-quarter contributions from the Japan and Malaysia properties acquired in March and August 2012 respectively.

However these numbers would have been better if not for the depreciation of the Japanese Yen. Plife REIT takes in a significant amount of revenue from Japan where it holds 32 nursing homes and 1 pharmaceutical manufacturing facility. As such, the slide of the Japanese Yen against the Singapore dollar continues to chip away at its performance as it did from the start of 2013.

Distributable income for 1Q 2013 increased 2.9 percent year-on-year to S$16.0 million, up from 1Q 2012’s S$15.5 million. Accordingly, DPU for 1Q 2013 rose 2.9 percent to 2.64 cents, from 2.56 cents in 1Q 2012. Excluding the one-off tax adjustment, both distributable income growth and DPU growth for 1Q 2013 would have been 7.0 percent year-on-year.

As at 31 March 2013, PLife REIT maintained 100 percent occupancy at its properties with locked-in long-term master leases. In addition, 90 percent of its total portfolio enjoys downside revenue protection with 68 percent of the total portfolio pegged to a CPI-linked rent revision formula. These provide earnings visibility during times of economic uncertainty as well as rental income growth upside.

PLife REIT has stated that it remains only cautiously optimistic about its near to medium term acquisition prospects due to ongoing uncertainties in the global markets. But it believes that the region’s healthcare industry will remain robust due to rising demand for better quality private healthcare service driven by fast-ageing populations.

Mr Yong Yean Chau, Chief Executive Officer of the Manager said, “We continue to see opportunities in the region’s growing healthcare sector and aim to capitalise on this trend to grow further. Our healthy gearing level provides us with the flexibility to make yield-accretive acquisitions as and when the right opportunity arises.”

Units of Plife REIT are currently trading slightly lower from the previous day's close on the SGX at S$2.75

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.