Parkway Life REIT Mount Elizabeth Hospital

Singapore-listed healthcare real estate investment trust Parkway Life REIT (PLife REIT) (SGX:C2PU) has announced a distribution per unit (DPU) of 2.90 Singapore cents for its 4Q 2014, an increase of 2.9% from the 2.82 Singapore cents from the corresponding period in 2013.

The quarter’s results brings PLife REIT’s DPU for the financial year to 11.52 Singapore cents, representing an increase of 7.1% year-on-year.

PLife REIT has attributed the performance to acquisitions and rental growth of existing properties attained during the year. Gross revenue for the quarter saw a 1.5% increase to SGD25.1 million from SGD24.7 million in 2013.

Correspondingly 4Q 2014 net property income rose 1.3% to SGD23.5 million and FY2014 net property income increased by 7.1% to SGD93.8 million.

“The higher revenue was mainly from rental income contributions from Japanese properties acquired in second half 2013 and 2014”, said PLife REIT in an official release announcing the results.

“Additionally, higher rent from the Singapore properties, due mainly to increased growth rate of 2.81% for Year 8 of lease term commencing 23 August 2014, also contributed to the revenue growth”, it added.

69% of PLife REIT’s total portfolio is pegged to a CPI-linked rent revision formulae to ensure future growth. The REIT owns a portfolio of 41 properties worth approximately SGD1.5 billion as at 31 December 2014.

PLife REIT has no long-term debt refinancing needs till FY2016, with current effective all-in-cost of debt of 1.4% as at 31 December 2014. The REIT’s gearing is currently at 35.2%.

Yong Yean Chau, CEO of PLife REIT’s manager, has indicated that he remains upbeat for 2015. “Governments in the region are expected to continue to foster partnership with private sectors to enhance service offerings to patients”, said Yong. “We believe the regional healthcare industry will remain positive over the long term”, he added.

Units of PLife REIT ended the trading day unchanged from its previous close at SGD2.43.

Parkway Life REIT Mount Elizabeth Hospital
Parkway Life REIT property in Singapore, Mount Elizabeth Hospital

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.