ParkwayLife REIT 1Q2020 Financial Results – Stable In Times of Uncertainties

Parkway Life REIT Logo

ParkwayLife REIT is a healthcare REIT. If you are familiar with ParkwayLife REIT, you know that their major assets are the nursing homes in Japan. Japan is not spared from the COVID-19 pandemic either.

ParkwayLife REIT has announced their 1Q2020 financial results on 22nd April 2020. Although the financial results are not as impressive as industrial REITs, ParkwayLife REIT had performed pretty well.

Gross Revenue increased by 5.2% to S$29.9 million in 1Q2020. Net Property Income (“NPI”) grew by 4.5% to S$27.7 million due to rental from newly acquired properties in 4Q2019. Distributable amount increased by 5.7% to S$21.0 million. Even though ParkwayLife REIT had planned to set aside S$1.7 million as part of COVID-19 related relief measures to support their tenants where necessary, they only retained S$850,000 in 1Q2020. Distribution Per Unit (“DPU”) still grew 1.4% to 3.32 cents after the capital retention.

1Q2020 Financial Results

1Q2020
(S$’000)
1Q2019
(S$’000)
YoY(%)
Gross Revenue29,86928,3905.2%
Net Property Income27,74626,5424.5%
Distributable amount before capital distribution
retention
20,95119,8295.7%
Distributable Amount20,10119,8291.4%
Distribution Per Unit (“DPU”) (cents)3.323.281.4%

Occupancy

Occupancy for Singapore and Japan stood at 100% while the occupancy for Malaysia stood at 31%. Thus the average occupancy is 99.7% which is still healthy.

Debt

Gearing ratio stood at 38.5%.

Current Valuation

ParkwayLife REIT has paid out a total of 13.12 cents in FY19. Based on the current share price of S$3.31, this translate to a current dividend yield of 3.96%.

If you managed to buy ParkwayLife REIT at the low of S$2.61 when the market crashed last month, this will give you a current dividend yield of 5.03%.

ParkwayLife REIT 1Q2020 Financial Results - Stable In Times of Uncertainties

Summary

You can never be wrong with ParkwayLife REIT. This is one REIT whereby the management had proven track records of growing its DPU and NPI year on year. The “Up only” rent review
is provisioned for most of their nursing homes and nursing homes is where ParkwayLife REIT’s crown jewel is.

Although the dividend yield is low at 3.96%, what you gain is stability and good sleep at night without worrying about its performance.

REITs Limited Time Offer!

REITs Limited Time Offer!

The Federal Reserve announced that it will cut interest rates to zero as part of its emergency measure to protect the economy from the impact caused by the COVID-19 virus. I thought that this will give the stock market a boost but it didn’t. The stock market plunged further and this makes REITs certainly a lot cheaper at ridiculous prices I have never seen before.

Below are the stocks that I currently held in my stock portfolio. With the dip in stock prices, the current dividend yield had increased which makes certain REITs very attractive. Do expect further downside and do not expect recovery that soon. For long term dividend investors, this should not be much of an issue.

I will probably wait for the stock market to hold steady at current levels before deploying more tranches of my cash.

Stock NameTotal Dividends Paid (Cents) (FY19)Closing Price (18th March 2020)Current Dividend Yield (%)
OUE Commercial REIT3.31S$0.3210.34%
Frasers Commercial Trust9.60S$1.128.57%
Frasers Logistics and Industrial Trust7.00S$0.828.54%
SPH REIT5.60S$0.747.57%
ComfortDelgro9.79S$1.556.32%
CapitaMall Trust11.97S$1.836.54%
Mapletree Commercial Trust9.14S$1.775.16%
Parkway Life REIT13.19S$2.814.69%
ST Engineering15S$3.304.55%

Straits Times Index Fell 6.03% Due to Oil Price War

Straits Times Index Fell 6.03% Due to Oil Price War

Amidst the COVID-19 outbreak which has caused much volatility in the stock market, the stock market plunged further today on the news of Riyadh (Saudi Arabia) slashing crude for April delivery prices. This had sparked the massive sell off of oil related stocks.

The Straits Times Index (STI) took a beating and fell as much as 6.03%. With the massive sell off, this opens up an opportunity in the current stock market.

Straits Times Index Fell 6.03% Due to Oil Price War

Below are the stocks that I currently held in my stock portfolio. With the dip in stock prices, the current dividend yield has increased which makes certain REITs attractive. For investors who have been hoping for a dividend yield of at least 5% and above, this is probably the moment you are waiting for.

Stock NameTotal Dividends Paid (Cents) (FY19)Closing Price (9th March 2020)Current Dividend Yield (%)
OUE Commercial REIT3.31S$0.447.52%
Frasers Commercial Trust9.60S$1.596.04%
Frasers Logistics and Industrial Trust7.00S$1.205.83%
SPH REIT5.60S$0.975.77%
ComfortDelgro9.79S$1.815.41%
CapitaMall Trust11.97S$2.395.01%
Mapletree Commercial Trust9.14S$2.214.14%
Parkway Life REIT13.19S$3.463.81%
ST Engineering15S$4.033.72%