Parkway Life REIT posts 3Q21 net property income fell 3 percent

Japanese 1,000 yen notesJapanese 1,000 yen notes

Parkway Life REIT reported Wednesday its third quarter net property income fell 2.9 percent on-year to S$27.28 million amid higher management fees and a doubtful debt.

Gross revenue for the July-to-September period edged up 1.2 percent on-year to S$30.53 million, the REIT said in a filing to SGX.

“The growth was largely due to the higher rent from Singapore properties, revenue contribution from the Japan acquisitions completed in December 2020 and July 2021, and partially offset by the loss of income from the divestment of a non-core property in Japan (P-Life Matsudo) in January 2021 and the depreciation of Japanese yen,” the REIT said in the filing.

Management fees increased 2.1 percent on-year to S$3.23 million on higher deposited property value, valuation gains on the existing property portfolio and higher net property income from the Japan property acquisitions, the filing said.

Distributable income to unitholders edged up 0.8 percent on-year in the quarter to S$21.6 million amid one-off allowances for doubtful debts, lower financing costs from a loan refinancing initiative and lower interest costs on Singapore dollar borrowings, the REIT said.

The doubtful debt of S$1.1 million was due to a rent default by a previous operator of three of the nursing home properties in Japan which had filed for Civil Rehabilitation Proceedings (Minji Sasei), Parkway Life REIT said, adding it has filed a claim for the outstanding rent due and has secured a replacement operator.

The distribution per unit (DPU) for the quarter is 3.56 Singapore cents, up 0.8 percent from 3.54 Singapore cents in the year-ago period, the REIT reported.

Yong Yean Chau, CEO of the REIT’s manager, was upbeat on the results, and on the renewal of the REIT’s master leases for the Singapore hospitals.

“The successful renewal of the master leases for the Singapore Hospitals marked the extension of the strategic collaboration between PLife REIT and IHH Healthcare Berhad, ensuring that we remain well-positioned to ride on the growth potential of the Singapore healthcare industry,” Chau said in the statement. “Coupled with the further strengthening of the group’s capital and financial position, PLife REIT stands in good stead to deliver continual stable distributions to unitholders.”

Parkway Life REIT has a portfolio of 55 properties in Asia Pacific valued at around S$2.29 billion, including Singapore properties Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital.