Higher hospital rents boost Parkway Life REIT’s profits by 9.5% in 1H

Its DPU hit a record high in Q2.

Parkway Life REIT’s shareholders must be popping the champagne over the healthcare REIT’s impressive Q2 results. PLife REIT posted a net property income of S$46.6m in 1H14, a 9.4% y-o-y improvement from the same period in 2013.

PLife REIT also posted a distribution per unit (DPU) for 2Q14, representing a 10.2% increase over the same period of the preceding year. For 1H14, DPU growth was 8.5% year-on-year at 5.72 cents.

According to Yong Yean Chau, Chief Executive Officer of Parkway Trust Management Limited, “Our strong results this quarter was driven mainly by acquisitions and rental growth of existing properties, underlining the success of our strategies. Properties we acquired in Japan in the second half of 2013 and first quarter of 2014 have boosted our revenue, contributing to our healthy and steadfast DPU growth that has been on the rise since our IPO in 2007. In fact, we experience another record high quarterly DPU of 2.90 cents for 2Q 2014.”

Here's more from Parkway REIT:

On a half-year comparison, PLife REIT’s gross revenue rose 9.5% to S$49.9 million, from S$45.6 million in 1H 2013. Net property income for 1H 2014 rose correspondingly to S$46.6 million, a 9.4% y-o-y improvement from the same period in 2013.

In 2Q 2014, PLife REIT’s gross revenue rose 12.2% to S$25.3 million, from S$22.6 million in 2Q 2013, largely bolstered by properties acquisitions in 2H 2013 and 1Q 2014. Net property income for 2Q 2014 was S$23.6 million, 12% higher compared with a year ago. Revenue was also driven by higher rent from the Singapore Hospitals.

With yield accretive acquisitions, higher rent from existing properties and the positive effect of net income hedge, Plife REIT’s 1H2014 distributable income rose to S$34.6 million, an increase of 8.5% y-o-y.

Any adverse impact from the depreciation of the Japanese Yen has been mitigated as PLife REIT has locked in the Japan net income hedge for the next few years.