“As we continue to build on our proven strategies, we are pleased to deliver another quarter of steady DPU growth since IPO. Our rejuvenated portfolio of assets following the 2nd asset recycling and reinforced capital structure has strengthened our foundation as we look forward to delivering further growth in the year ahead.”
Mr. Yong Yean Chau, Chief Executive Officer
3.28 cents SGD (1Q 2017)
ParkwayLife Reit Reports DPU of 3.28 cents for 1Q 2017
- Overall DPU growth of 9.6% for 1Q 2017
- DPU growth of 2.2% from recurring operations notwithstanding the divestment in December 2016
- Divestment gain of S$5.39 million to be equally distributed over four quarters in FY2017
- Successful completion of 2nd asset recycling initiative enhances the value of PLife REIT
Parkway Trust Management Limited (the “Manager”), as manager of Parkway Life Real Estate Investment Trust (“PLife REIT” or the “Group”), one of Asia’s largest listed healthcare REITs, announced today its results for the first quarter ended 31 March 2017 (“1Q 2017”).
Notwithstanding the divestment of four Japan nursing homes in December 2016, the Distribution Per Unit (“DPU”) from its recurring operations continued to grow by 2.2% to 3.06 Singapore cents in 1Q 2017. The gain from the divestment will be equally distributed over the four quarters of the financial year ending 31 December 2017 (“FY2017”), with a payout of 0.22 Singapore cents for 1Q 2017. On an overall basis, the DPU for 1Q 2017 has increased by 9.6% to 3.28 Singapore cents, from 2.99 Singapore cents in the corresponding period a year ago (“1Q 2016”).
Despite the divestment in December 2016, PLife REIT’s 1Q 2017 gross revenue at S$26.9 million, was comparable to the gross revenue for 1Q 2016. For this quarter, the gross revenue was underpinned by the contribution from a nursing home acquisition in March 2016, higher rent from the Singapore properties and the appreciation of the Japanese Yen. Following the completed acquisition of the five Japan properties on 24 February 2017, the new properties had started contributing to the Group’s revenue in 1Q 2017.
Correspondingly, net property income for 1Q 2017 at S$25.1 million was also consistent with the net property income for 1Q 2016.
Reinforced Capital Structure Preserves Resiliency of the REIT
As part of the Group’s ongoing efforts to strengthen its balance sheet, all its long-term loans which were due in FY2018 had been successfully termed out in 1Q 2017. There will be no long-term refinancing need till FY2019.
As at 31 March 2017, gearing remains healthy at 37.6% with a low effective all-in cost of debt of 1.3%. With its interest rate exposure being largely hedged and JPY net income hedge put in place till 1Q 2020, PLife REIT remains resilient in the face of rising interest rates.
2nd Asset Recycling Initiative Enhances Value of PLife REIT
As at 1Q 2017, PLife REIT successfully completed its 2nd asset recycling initiative as it re- deployed the freed up capital from the divestment of its four Japan properties in December 2016 to acquire five Japan properties at JPY4,759 million (approximately S$59.5 million4. The acquisition marks PLife REIT’s foray into Yamaguchi Prefecture and deepened the Group’s presence in the Chiba prefecture. The addition of another established operator also added diversity to the Group’s tenant base.
By divesting its less strategic assets and acquiring better assets at more accretive yield level, this 2nd asset recycling initiative unlocked value for PLife REIT as it strengthen the quality of its Japan portfolio.
Mr. Yong Yean Chau, Chief Executive Officer of the Manager, commented: “As we continue to build on our proven strategies, we are pleased to deliver another quarter of steady DPU growth since IPO. Our rejuvenated portfolio of assets following the 2nd asset recycling and reinforced capital structure has strengthened our foundation as we look forward to delivering further growth in the year ahead.”
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Important Notice
This press release is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in Parkway Life Real Estate Investment Trust (“PLife REIT” and the units in PLife REIT, the “Units”).
The value of the Units and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by, Parkway Trust Management Limited, as Manager of PLife REIT, or any of its affiliates. Investors have no right to request the Manager to redeem their Units while the Units are listed. It is intended that Unitholders of PLife REIT may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the “SGX-ST”). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of PLife REIT or the Manager is not necessarily indicative of the future performance of PLife REIT or the Manager. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested.