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Parkway Life REIT Enjoys DPU Growth With Three New Japan Properties



Key Highlights:

  • Parkway Life REIT (SGX: C2PU)'s 4Q19 DPU grew 2%

  • The annualised yield and price to book ratio are 3.9% and 1.74 respectively


1. Dividends


Net property income was up 2.3% to $27.3m. The was mainly due to:

  • Three new Japan properties acquired in Dec 2019

  • Rental growth from existing properties

  • Cost savings from refinancing activities


The annualised yield is 3.9%. As a healthcare REIT, Parkway Life has been delivering very consistent results to the unit holders. Both the DPU and price has been in the uptrend over the years,


Source: reitscompass's REITs Insider ratings



2. Portfolio


Portfolio occupancy dropped slightly to 99.7%. The portfolio leverage is currently at the healthy side of 37.1%. It maintains one of the lowest interest cost at 0.8%, with 83% of the loans are on fixed rates.


It is currently trading at a price to book ratio of 1.74.



3. Growth Catalyst


The REIT still have some debt headroom for future acquisition, $95.5m based on 40% gearing cap. With a portfolio of Japan assets, Parkway Life REIT has also hedged its JPY net income till 2024, to protect against any currency volatility.

The long-term outlook of the healthcare industry continues to be bullish, driven by the ageing population and the increasing demand for better quality healthcare.


Summary


Parkway Life REIT remains as one of the most stable S-REIT, with low-interest cost and high-interest coverage. With such a low yield of 3.9%, we would continue to monitor the REIT for better entry price.



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