SINGAPORE (July 25): Parkway Trust Management, as manager of Parkway Life Real Estate Investment Trust, has declared a DPU of 3.32 cents for 2Q17, representing a 10.3% increase over the DPU of 3.01 cents in 2Q16.
This was supported divestment gains of $5.39 million from the asset recycling exercise completed in February, which are being distributed equally over the four quarters of the FY17 ended Dec.
But excluding contribution from the distribution of these gains, distributable income from operations grew by 2.9% in 2Q17 to $18.7 million.
Gross revenue for 2Q17 and 1H17 ended at $27.7 million and $54.6 million, remaining largely consistent with a growth of 1.1% and 0.7% for 2Q 2017 and 1H17, respectively.
Correspondingly, net property income increased by 1.4% in 2Q17 and 0.7% in 1H17 to $25.9 million and $51 million respectively. The gain in net property income was largely driven by the rent contribution from properties acquired in 1Q17 and the upward minimum guaranteed rent revision of the Singapore hospital properties.
Under the CPI + 1% rental revision formula, income stream from the Singapore properties are assured of annual rental increments in tandem with Singapore’s prevailing inflation rate.
With CPI picking up, Parkway Trust Management says Singapore properties are set to enjoy a 1.27% increase in Minimum Guaranteed Rent for the 11th year of lease term (from 23 August 2017 to 22 August 2018) over the total rent payable for the previous year.
Parkway Trust Management says the group has fully hedged its Japanese Yen net income till 1Q20 and the interest rate exposure is largely hedged, with the group enjoying a lower effective all-in cost of debt of 1.1%, compared to 1.4%. Additionally, PLife REIT has an interest coverage ratio of 10.7 times, with no long-term debt refinancing needs till 2019.
As at June 30 2017, gearing remains optimal at 37.4%, within the 45% limit allowed for
REITs under Monetary Authority of Singapore rules.
Units in Parkway Life REIT closed 1 cent higher at $2.67 on Monday.
