On Aug 26, IHH Healthcare announced revenue, Ebitda, and net income grew to RM8.2 billion, RM2.1 billion and RM858.9 million respectively in 1HFY2021, for the six months to June 30. Singapore’s Ebitda was RM890.3 million ($287 million), which comprises Parkway Pantai. ParkwayLife REIT is reported under its own segment.
Assuming that the yield on Mount Elizabeth Novena is around 4.8% - IHH says its hospital capitalisation rates range from 4.8% to 6.7% - Mount Elizabeth Novena’s Ebitda is likely to be around $49 million, market watchers indicate. Parkway Pantai has around 45 clinics of which nine or so are in medical centres of the hospitals. Based on ParkwayLife REIT’s rental revenue from its Singapore hospitals of $34.9 million, its rent/Ebitda ratio is likely to be at approximately 15% in 1H2021.
This is significantly below the levels of ParkwayLife REIT’s Japanese nursing homes, which are in the ‘normal’ 45% level, and the rent/Ebitda ratios of other healthcare REITs, market observers indicate.
As such, IHH has a long runway for growth in Singapore, including when the new master lease is implemented, as this takes into consideration IHH’s own upside.
ParkwayLife REIT’s manager indicated on July 14 that its the new master lease agreement is DPU accretive. DPU rises from an annualised 13.9 cents in 2021 to a projected 14.3 cents in FY2023. By year 4 of the new master lease, 2026, DPU rises to 18.26 cents, assuming no change in units.
