Parkway Life REIT’s revenue jumps 6% to S$23m in 4Q11

Revenue growth was driven by higher rent from the Singapore Hospital Properties.

For 4Q 2011, PLife REIT registered gross revenue of S$22.8 million, an increase of 6.3% from S$21.5 million in the previous corresponding period, according to a financial statement. This was primarily due to revenue contribution from the Japan nursing home acquired in January 2011 and appreciation of the Japanese Yen. Revenue growth was further driven by higher rent from the Singapore Hospital Properties due to rental growth rate of 5.3% for Year 5 of the lease term commencing 23 August 2011. Property expenses were S$2.0 million, resulting in a S$1.2 million or 5.9% increase in net property income to S$20.8 million in 4Q 2011.

For FY2011, gross revenue increased 9.6% from S$80.0 million in the previous corresponding period to S$87.8 million, mainly due to full year revenue contribution from the properties acquired in 2010 and 2011, and higher rent from existing properties. Property expenses were S$7.5 million, resulting in a S$6.7 million or 9.1% increase in net property income to S$80.3 million in FY2011.

As a result of the yield-accretive acquisitions made in Japan, higher rent from existing properties and savings from lower financing costs, distributable income for 4Q 2011 increased 3.2% to S$14.9 million, while distributable income for FY2011 increased 9.2% to S$58.1 million.

Accordingly, distributable income per Unit for 4Q 2011 grew from 2.38 cents in 4Q 2010 to 2.47 cents, while DPU for FY2011 grew from 8.79 cents in FY2010 to 9.60 cents. Distribution payment is expected on 29 February 2012.

Whilst the portfolio expanded, overall financing costs for FY2011 fell S$2.2 million or 19.8% year-on-year, mainly due to interest cost savings from the refinancing and re-pricing exercises completed in August 2010 and January 2011. Finance costs were further reduced due to lower locked-in hedged rates arising from the recent extension of interest rates hedges with effect from August 2011. This resulted in overall interest cost savings of approximately S$2.5 million for FY2011.

As at 31 December 2011, PLife REIT’s weighted average term to debt maturity was 2.92 years, and the effective all-in cost of debt was 1.64%. Gearing stands at a healthy level of 34.8%, representing further debt headroom of S$266.4 million before reaching 45% gearing.