Friday, August 3, 2012

Parkway Life Reit posts DPU of 2.48 cents

Business Times: Fri, Aug 03

PARKWAY Life Real Estate Investment Trust (PLife Reit) has posted a second-quarter distribution per unit of 2.48 cents, up 4.6 per cent from 2.37 cents a year earlier.

The distribution, payable on Sept 6, translates to an annualised distribution yield of 5.28 per cent based on an annualised DPU of 9.92 cents and the unit's closing price of $1.88 on June 29.

The higher Q2 DPU - which brought first-half DPU to 5.04 cents, up from 4.73 cents - came on the back of growth in its net property income and revenue for Q2 and H1.

Income available for distribution - after deducting income retained for capital expenditure - rose 4.9 per cent to $15.01 million for the three months ended June 30.

Net property income for Q2 grew 9.3 per cent year-on-year to $21.4 million. This takes H1 net property income to $42.3 million, up 7.5 per cent.

Q2 gross revenue rose 9.5 per cent to $23.4 million, with the Reit attributing it to a full quarter of revenue contribution from three Japan properties acquired in March 2012, as well as higher rent from its Singapore properties. For H1, gross revenue climbed 7.7 per cent to $46.2 million.

PLife Reit said that its finance costs fell 6.3 per cent for H1 because of interest-cost savings from the lower locked-in hedged rates arising from the extension of interest rate hedges completed in August 2011.

The Reit added that it had in place mechanisms to stagger its debt payments and reduce the bunching effect of large loan amounts expiring in a single year.

In June, it put in place a four-year $80 million revolving credit facility for the pre-emptive refinancing of short-term loans as well as $50 million floating rate notes (FRN) maturing in financial years 2012 and 2013.

It has used the facility to buy and cancel $35.75 million of the outstanding FRN. The remaining $14.25 million of the FRN will be covered by the facility when the FRN falls due in March next year.

"Following the successful completion of this exercise, PLife Reit would have no refinancing needs for its existing total debt portfolio until FY2014, with its weighted average debt maturity period lengthened from 2.86 years to 2.92 years."

It said that under its CPI + one per cent rental revision formula, its Singapore hospital properties are assured of annual rent increments in tandem with the prevailing inflation rate. With CPI growth of 5.31 per cent, the Singapore hospital properties are set to enjoy a 6.31 per cent increase in minimum guaranteed rent for the sixth year of lease term (from Aug 23) over the the total rent payable for the previous year.

It also said that it had on Wednesday completed its acquisition of strata-titled units in Gleneagles Medical Centre in Kuala Lumpur, marking its first foray into Malaysia. It said that it was still on the lookout for acquisition opportunities there.

In May, it had rolled out its fifth asset-enhancement initiative (AEI) for its Maison des Centenaire Ishizugawa nursing home property in Japan, where it bears property refurbishment costs in exchange for incremental rent from its lessees. The AEI was expected to yield an annual return on investment of 18.5 per cent, the Reit said.

PLife Reit owns 36 properties with a portfolio worth $1.4 billion, including Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital. Its indirect holding company, IHH Healthcare Berhad, has a 35.81 stake in it.

The Reit closed trading unchanged yesterday at $1.995.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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