PLife – BT

PLife Reit Q4 distributable income up 16.6%

Trust also acquires another nursing home property

PARKWAY Life Reit (PLife Reit) has registered $14.4 million in distributable income for the fourth quarter ended Dec 31, 2010. This is a 16.6 per cent increase from $12.4 million a year ago.

Accordingly, distribution per unit (DPU) for the period increased to 2.38 cents, from 2.05 cents.

This is despite higher financing costs due to 100 per cent debt funding of Japanese properties acquired in 2010.

Net property income rose 19.5 per cent to $19.68 million and gross revenue increased 21.1 per cent to $21.49 million.

Parkway Trust Management Limited (PTML) puts the positive results down to its ‘yield-accretive acquisitions, interest cost savings from a refinancing exercise and higher rent from the existing properties’.

The full quarter revenue contribution from 19 Japan nursing home properties acquired in 2009 and 2010 was $3.4 million.

The re-pricing of a five-year 5.3 billion yen (S$84.0 million) loan facility maturing in H2 2014 resulted in total interest cost savings of about $3.45 million for the remaining loan term.

‘With the re-pricing, the weighted average all-in cost of debt for PLife Reit has been reduced from 2.13 per cent to 1.94 per cent,’ said PTML chief executive Yong Yean Chau.

For the financial year ended Dec 31, 2010, gross revenue increased 20 per cent to $80 million. Distributable income grew 13.8 per cent to $53.17 million. The DPU for 2010 is 8.79 cents, compared with 7.74 cents in 2009.

The DPU for Q4 is payable on Feb 28.

Commenting on the results, Mr Yong said: ‘Building on our solid fundamentals, we are delighted to have grown from strength to strength, with DPU registering an increase of 49.7 per cent since IPO.’

PTML also announced the acquisition of another nursing home property in Fukuoka, Japan for 564 million yen.

This represents an 8.2 per cent discount to its 614 million yen valuation by Colliers Halifax, said PTML.

The acquisition is expected to be completed by Jan 31, 2011, and will be fully funded by a long-term unsecured committed term loan facility due June 2015.

The property will have a fresh 20-year master lease and has an expected net property yield of 8.0 per cent.

The counter gained two cents yesterday to close at $1.80.