Last July, PLife REIT’s manager negotiated a new master lease agreement with sponsor IHH Healthcare, raising its weighted average lease expiry to more than 17 years. As part of the new master lease agreement, PLife REIT has the right of first refusal to Mount Elizabeth Novena.
This is not the right year to be investing in REITs because of the yield curve. Risk-free rates as represented by the yields of both 10-year Singapore Government Securities and 10-year US Treasuries are on a rising trend. As a result, to maintain the yield spread, REIT unit prices may retreat. The US Federal Reserve’s increasingly hawkish stance indicates four rate hikes this year, with the first one kicking off in March. Interestingly, ParkwayLife REIT’s (PLife REIT) unit price has already retreated from a high of $5.13 to $4.91.
PLife REIT owns three hospitals in Singapore, where IHH Healthcare is the master lessee, and an IHH unit is the operator. PLife REIT owns 52 nursing homes in Japan, operated and tenanted by 27 operators and master lessees. The portfolio was last valued at $2.29 billion.
