Singapore REITs

ParkwayLife REIT Reports 2.5% Year-on-Year Increase in Q2 DPU Despite Covid-19

July 30, 2020 — Parkway Trust Management Limited, as manager of Parkway Life Real Estate Investment Trust, one of Asia’s largest listed healthcare REITs, today announced its results for the second quarter ended 30 June 2020 (2Q 2020) and first half ended 30 June 2020 (1H 2020).

Gross revenue for the periods under review recorded a year-on-year (“y-o-y”) growth of 4.9% in 2Q 2020 to S$30.3 million and a 5.1% increase in 1H 2020 to S$60.1 million, mainly due to revenue contribution from three Japan nursing rehabilitation facilities acquired in 4Q 2019, higher rent from Singapore properties as well as appreciation of the Japanese Yen (“JPY”). Net property income and amount available for distribution increased in line with gross revenue.

Net property income registered a 5.3% y-o-y increase in 2Q 2020 to S$28.2 million, and an increase of 4.9% to S$56.0 million in 1H 2020. Similarly, the reported amount available for distribution grew by 5.2% y-o-y in 2Q 2020 and 5.4% in 1H 2020.

During the quarter, the Group has retained the remaining S$850,000 as part of the S$1.7 million COVID-19 related relief measures for tenants announced in 1Q 2020.

Notwithstanding the amount retained, total distributable income to Unitholders for 2Q 2020 and 1H 2020 rose 2.5% and 1.9% y-o-y to S$20.3 million and S$40.4 million respectively, translating to Distribution per Unit (“DPU”) of 3.36 Singapore cents and 6.68 Singapore cents for the corresponding periods.

Strengthened Capital Structure

The Group remained steadfast in proactively managing its exposure to foreign exchange risk for its portfolio of 49 healthcare properties in Japan.

This was achieved by capitalising on the recent strengthening of the JPY and entering into JPY forward contracts to extend the JPY net income hedge maturity till 2Q 2025, providing the Group with a strong shield against JPY currency volatility and enhancing the stability of distribution to Unitholders.

As at 30 June 2020, there were no long-term debt refinancing needs for the Group till June 2021 and the Group continues to enjoy an effective low all-in cost of debt of 0.60%.

With approximately 88% of its interest rate exposure hedged, PLife REIT’s interest coverage ratio stood at 15.8 times. Gearing remained optimal at 38.3% as at the end of the quarter.

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