Parkway Life REIT achieves 10.3% increase in DPU for 2Q 2017 on divestment gains

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Parkway Life REIT has announced a distribution per unit (DPU) of 3.32 Singapore cents for its 2Q 2017, which is an increase of 10.3% over the same period in 2016.

The increase can be attributed to divestment gains of SGD5.39 million (USD 3.9 million), which are being distributed equally over the four quarters of FY 2017.

Gross revenue for the period grew by 1.1% year-on-year to SGD27.7 million (USD20.3 million) while net property income (NPI) increased by 1.4% in 2Q 2017 to SGD25.9 million.

The gain in net property income is largely driven by the rent contribution from properties acquired in 1Q 2017, and the upward minimum guaranteed rent revision of its Singapore hospital properties, said the healthcare REIT.

Parkway Life REIT’s Singapore properties are assured of annual rental increments in tandem with the country’s prevailing inflation rate, as provided for under the consumer price index (CPI) + 1% rental revision formula provision found in lease agreements.

The REIT’s gearing as at 30 June 2017 was at 37.4%, with effective all-in cost of debt at 1.1%.

“With prudent capital and risk management strategies, our interest rate exposure have been largely hedged, insulating us from any related headwinds”, said Yong Yean Chau, CEO of the REIT’s manager.

“We seek to continue delivering stable, long-term growth for our unitholders and will continue looking out for suitable opportunities as they come along to strengthen our portfolio”, he added.

Units of Parkway Life REIT are currently trading on the Singapore Exchange at SGD2.68.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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