REIT-TIREMENT - REITs Investing & Personal Finance

A blog about REITs investment & personal finance

Wednesday, April 28, 2021

Parkway Life REIT Review @ 28 April 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 53 properties across Singapore, Japan and Malaysia.

Performance Highlight

Gross revenue, NPI, distributable income and DPU increased YoY by 0.4%, 1%, 7.4% and 7.4% respectively. The increase mainly due to contribution from a nursing home acquired on 18 December 2020 and the absence of one-off COVID-19 related relief measures retained in 1Q 2020, but offset by the divestment of P-Life Matsudo on 29 January 2021.

Related Parties Shareholding

  • REIT sponsor's shareholding is high at 35.58%
  • REIT manager's shareholding is low at 0.33%
  • Directors of REIT manager's shareholding is moderate at 0.15%

Lease Profile

  • Occupancy is high at 99.7%
  • WALE is long at 5.37 years
  • Highest lease expiry within 5 years is high at 59.4% which falls in 2022
  • Weighted average land lease expiry is slight long at 74.46 years

Debt Profile

  • Gearing ratio is moderate at 37.8%
  • Cost of debt is low at 0.55%
  • Fixed rate debt % is high at 85%
  • All debts are unsecured debt
  • WADM is long at 3.5 years
  • Highest debt maturity within 5 years is low at 24% which falls in 2022
  • Interest coverage ratio is high at 20.9 times

Diversification Profile

  • Top geographical contribution is moderate at 58%
  • Top property contribution is high at 35.6%
  • Top 5 properties contribution is high at 63%
  • Top tenant contribution is high at 58% 
  • Top 10 tenants contribution is high at 84.7% 

Key Financial Metrics

  • Property yield is high at 5.7%
  • Management fees over distribution is moderate at 14.9% in which unitholders receive S$ 6.71 for every dollar paid 
  • Distribution on capital is high at 4.3%
  • Distribution margin is high at 70.1%

Trends

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

Relative Valuation

  • Dividend Yield - Past 4 quarters DPU @ 14.04 cents / average yield @ 4.49% = S$ 3.13
  • Price/NAV - NAV @ S$ 1.98 x average P/NAV @ 1.62 = S$ 3.21


Author's Opinion

 Favorable Less Favorable
High Sponsor's ShareholdingLow Manager's Shareholding
High OccupancyConcentrated Lease Expiry
Long WALEHigh Top Property & Top 5 Properties Contributions
Low Cost of DebtHigh Top Tenant & Top 10 Tenants Contributions
100% Unsecured Debt 
Long WADM 
Well Spread Debt Maturity 
High Interest Coverage Ratio 
High Property Yield 
High Distribution on Capital 
High Distribution Margin 
DPU Uptrend 
NAV per Unit Uptrend 
Interest Coverage Ratio Uptrend

As always, PLIFE continues to deliver a good result. A thing to take note of would be PLIFE master lease for its Singapore properties (which contribute more than 50% of GRI) is expiring in August 2022. There is an option to extend the lease for another 15 years, hopefully, the manager would provide more info on this soon.


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support as a Patron and get SREITs Dashboard PDF or Data Excel

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

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 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 and 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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