REIT-TIREMENT - REITs Investing & Personal Finance

A blog about REITs investment & personal finance

Monday, February 01, 2021

Parkway Life REIT Review @ 1 February 2021

Basic Profile & Key Statistics

Parkway Life REIT (PLIFE) is a healthcare REIT that invests mainly in hospitals, medical centres and nursing homes. PLife owns 54 properties across Singapore, Japan and Malaysia.


Performance Review

Gross revenue and NPI increased YoY by 9% and 4.2% respectively due to contributions from properties acquired in 4Q 2019 and 4Q 2020 as well as upward rent revision. Distributable income and DPU both increased by 6.7% YoY. 

Lease Profile

  • Occupancy is high at 99.7%.
  • WALE is long at 5.74 years where the highest lease expiry of 57.4% falls in 2022.
  • Weighted average land lease expiry is slightly long at 73.65 years.


Debt Profile

  • Gearing ratio is moderate at 38.5%.
  • Cost of debt is low at 0.53%.
  • Fixed rate debt % is high at 87%.
  • All debts are unsecured debts.
  • WADE is long at 3.5 years where the highest debt maturity of 29% falls in 2022.
  • Interest coverage ratio is high at 18.1 times.


Diversification Profile

  • Top geographical contribution is moderate at 57.4%
  • Top property contribution is high at 36.8%.
  • Top tenant contribution is high at 57.4%.
  • Top 10 tenants contribution is high at 85.3%.

Key Financial Metrics

  • Property yield is moderate at 5.6%
  • Management fees over distribution is moderate at 15.2% in which unitholders receive S$ 6.58 for every dollar paid.
  • Distribution on capital is high at 4.3%
  • Distribution margin is high at 69%.

Trends

  • Uptrend - DPU, NAV per Unit, Interest Coverage Ratio
  • Flat - Distribution Margin
  • Slight Downtrend - Property Yield, Distribution on Capital


Relative Valuation

  • Dividend Yield - Past 4 quarters DPU @ 13.79 cents / average yield @ 4.6% = S$ 3.00
  • Price/NAV - NAV @ S$ 1.956 x average P/NAV @ 1.59 = S$ 3.11


Author's Opinion

 Favorable  Less Favorable
High OccupancyConcentrated Lease Expiry
Long WALEHigh Top Property Contribution
Low Cost of DebtHigh Top Tenant & Top 10 Tenants Contributions
100% Unsecured Debt 
Long WADE 
High Interest Coverage Ratio 
High Distribution on Capital 
High Distribution Margin 
DPU Uptrend 
NAV per Unit Uptrend 
Interest Coverage Ratio Uptrend

It is another solid quarter performance by PLIFE. Few days after the result release, PLIFE has announced to divest the Matsudo property which is a pharmaceutical product distributing and manufacturing facility. This property contributes 3.3% of Japan's gross revenue, which is around 1.4% of total gross revenue. The sales price of S$ 37.1 million is 12% above the purchased price.


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support this blog as a Patron and get SREITs Dashboard PDF

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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