Parkway Life REIT's Q3 net property income ticks up 8% to $24.3m

Thanks to its recently-acquired nursing home and higher property rents.

Parkway Trust Management Limited, as manager of Parkway Life Real Estate Investment Trust, one of Asia’s largest listed healthcare REITs, announced its results for the third quarter and nine months ended 30 September 2016.

According to the group, it saw a gross revenue increase of 8.2% to $28.1 million and 7.9% to $82.4 million. This $2.1 million increase was primarily driven by contribution from the recently-acquired nursing home, higher rent from the properties in Singapore and the appreciation of the Japanese Yen. In particular, Parkway East Hospital’s adjusted hospital revenue for the ninth year lease (23 August 2015 – 22 August 2016) has outperformed its minimum guarantee rent, contributing to the increase in revenue for the Singapore portfolio.

Correspondingly, it reported net property income of S$26.2 million for 3Q 2016, an 8.0% increase as compared to S$24.3 million in 3Q 2015.

This has brought DPU to 3.06 and 9.06 Singapore cents for 3Q 2016 and YTD 3Q 2016 respectively. The DPU from recurring operations continued to grow 2.7% 3Q year-on-year and 3.0% YTD 3Q y-o-y. On an overall basis, there was an 8.8% and 8.7% decline, due to the absence of one-off distribution of divestment gain.

Chief Executive Officer Yong Yean Chau said the group is committed to improving its performance through a robust renovations and re-enhancement of its assets.

"Since listing, we have devoted substantial effort to implementing asset enhancement initiatives with the aim of unlocking the value of our properties and developing them to their full potential,” he said.

Looking forward, Yong said it has been a tough year for the economy as investors are faced with uncertain market conditions and increased volatility.

"While we do expect some challenges in acquisition opportunities in the short to medium term, we continue to remain optimistic about PLife REIT’s prospects in the medium to longer term. REITs have been viewed as safe and stable investments in this risk-off environment and we are further boosted by the resilience and defensiveness of the healthcare sector. We are always striving to build on our strong fundamentals and robust growth drivers, and these factors have allowed us to continue delivering healthy returns for our Unitholders,” he noted.