[SINGAPORE] Parkway Life Reit has raised its first-quarter distribution per unit (DPU) by 1.3 per cent to S$0.0384 from S$0.0379 in the previous corresponding period.
Distributable income stood at S$25 million, up 9.1 per cent from S$22.9 million. Revenue climbed 7.3 per cent to around S$39 million, boosting net property income by 7.5 per cent to S$36.8 million.
The higher DPU and distributable income came on the back of the acquisitions of one more nursing home in Japan and 11 nursing homes in France in H2 FY2024, though this was partly offset by the depreciation of the yen, the real estate investment trust’s (Reit) manager said on Tuesday (Apr 22) in a Q1 business update.
DPU was also boosted by the “step-up” on the lease arrangement for Singapore hospitals. The long-term master leases with Parkway Hospitals Singapore was renewed for 20.4 years from Aug 23, 2022.
Sister company Parkway Hospitals Singapore is the master lessee for Mount Elizabeth, Gleneagles and Parkway East Hospital.
As Parkway Life Reit makes distribution on a semi-annual basis, there is no distribution for Q1. The DPU of S$0.0384 will form part of the H1 2025 distribution.
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To acquire the portfolio in France, its maiden investment into Europe, the Reit had a fundraising exercise which increased its unit base.
Finance costs for Q1 rose 26 per cent to S$3.3 million from S$2.6 million previously on the funding of capital expenditure, its Japan acquisition in 2024, and higher interest costs from yen debts, though these were partly offset by the yen’s depreciation.
As at March 2025, the Reit’s portfolio size stood at around S$2.5 billion, including 75 properties and 35 lessees. By revenue, 59.3 per cent of its properties are concentrated in Singapore, 32.7 per cent in Japan and 7.9 per cent in France. The bulk of its portfolio asset mix is taken up by hospitals and medical centres at 65.3 per cent, and nursing homes comprise 34.7 per cent, as at March 2025.
Its weighted average lease to expiry by revenue was 15.17 years. Less than 3 per cent of the Reit’s leases are due to expire each year for the next five years.
In terms of debt maturity profile, its current weighted average debt term to maturity stood at 3.3 years as at March 2025. The manager said its gearing was healthy at 36.1 per cent as at March, with ample debt headroom.
Growth strategy
Looking ahead, Parkway Life Reit is targeting expansion in growing healthcare markets, particularly in countries it has investments in.
It plans to leverage its first-mover advantage and strong network to expand in Japan, as well as to build a third key market that can contribute to its enhanced growth in the mid to long term, the manager said.
Units of Parkway Life Reit closed 0.5 per cent or S$0.02 higher at S$4.20 on Monday.
