PLife – BT

PLife Reit’s Q2 DPU rises 13.4%; revenue up 14.1%

PARKWAY Life Real Estate Investment Trust (PLife Reit) posted a 13.4 per cent rise year on year in distribution per unit (DPU) to 2.37 cents for the second quarter ended June 30.

Gross revenue strengthened 14.1 per cent to $21.38 million on the back of contributions from its nursing home properties in Japan as well as higher rentals from existing properties, while net property income rose 13.3 per cent to $19.6 million and income available for distribution was 13.4 per cent higher at $14.32 million.

For the quarter, earnings per unit were 2.28 cents, compared to 2.01 cents in the previous corresponding quarter.

For the six months ended June 30, the DPU was 4.73 cents compared to 4.16 cents in the same period last year. Gross revenue was 14.7 per cent higher at $42.87 million, while net property income climbed 14 per cent to $39.33 million and income available for distribution grew 13.9 per cent to $28.6 million.

PLife Reit also said that its Singapore properties – Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital – will enjoy a 5.3 per cent increase in minimum guaranteed rent for the fifth year of lease term (Aug 23, 2011, to Aug 22, 2012) over the previous year as its revised rental formula sees annual rental increments in line with Singapore’s inflation rate.

Meanwhile, PLife Reit has extended interest rate swap hedges with the principal amount of $208.6 million – 45 per cent of its loan portfolio – for an average of 3.5 years to leverage on the low interest rates. Therefore, the group will secure annual cost savings of $1.5 million, and a 15.8 per cent reduction of effective all-in cost of debt from 1.96 per cent to 1.65 per cent from August.

PLife Reit’s weighted average term to debt maturity was 3.45 years as at June 30, while its gearing stood at 34.3 per cent.

‘PLife Reit remains cautious about its near-term to medium-term acquisition prospects, in view of ongoing uncertainties in the global markets. Nonetheless, the long-term prospects of the regional healthcare industry continues to be robust due to rising demand for better quality private healthcare services,’ it said in its results release to the Singapore Exchange.

The DPU will be paid out on Sept 8.

Shares in PLife Reit closed at $1.895 yesterday, down half a cent.