ParkwayLife REIT 3Q2023 Business Update

ParkwayLife REIT 3Q2023 Business Update

ParkwayLife REIT Portfolio 3Q2023

On 1st November 2023, ParkwayLife REIT announced their 3Q2023 Business Update. ParkwayLife REIT is one of the largest listed healthcare REITs in Asia with an enlarged portfolio of S$2.20 billion.

In Q32023, ParkwayLife REIT had just completed the acquisition of two new nursing homes at JPY1,766.4 million (S$16.4 million) in Osaka Prefecture at approximately 11.9% below valuation.

You should have heard of the depreciation of Japanese Yen. Will the depreciation of Japanese Yen impact the distribution to unitholders?

Let us find out more below.

ParkwayLife REIT YTD 3Q2023 Financial Performance

Year To Date (YTD), ParkwayLife REIT’s Gross Revenue and Net Property Income have increased mainly due to the contribution from the five nursing homes acquired in September 2022, and higher rent from the Singapore properties under the new master lease agreements which commenced in August 2022.

Despite the gain, the higher rent was partially offset by the depreciation of the Japanese Yen.

YTD 3Q2023
(S$’000)
YTD 3Q2022
(S$’000)
Change
Gross Revenue 110,890  88,971 24.6%
Net Property Income 104,548 82,830 26.2%
Amount Available for Distribution 66,506 64,717 2.8%
Distribution Per Unit (“DPU”) (cents) 10.99 10.70 2.8%

Debt

ParkwayLife REIT 3Q2023 Debt Maturity

As of 30th September 2023, ParkwayLife REIT’s gearing stood healthy at 36.0%. There is ample debt headroom of $372.9 million and $638.9 million before reaching 45% and 50% gearing respectively.

There is also no long-term debt refinancing needs till March 2024. Current weighted average term to maturity of 2.8 years.

Occupancy

As of 30th September 2023, ParkwayLife REIT’s overall portfolio occupancy still stood strong at 99.7%. In fact, there is no changes at all since last quarter.

The occupancy of the Medical Centre in Malaysia continue to be a drag at 31% occupancy rate.

ParkwayLife REIT 3Q2023 Occupancy

Current Dividend Yield

ParkwayLife REIT Share Price 17-Nov-2023

As you can see from the chart above, the share price of ParkwayLife REIT has came down a bit. At the current share price of S$3.56 and FY2022 full year distribution of 14.38 cents, this translate to a current dividend yield of 4.04%.

Summary of ParkwayLife REIT 3Q2023 Business Update

Those investors who are familiar with ParkwayLife REIT should know that there is very little negatives about this REIT. Nevertheless, below are the pro and cons based on this business update.

Pros

  • Gross Revenue and Net Property Income have increased YTD 3Q2023.
  • Contribution from the five nursing homes acquired in September 2022.
  • Higher rent from the Singapore properties under the new master lease agreements.
  • ParkwayLife REIT’s gearing stood healthy at 36.0%.
  • No long-term debt refinancing needs till March 2024.
  • Stable current dividend yield of 4.04%.

Cons

  • Depreciation of the Japanese Yen.

 

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