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REITs investment & personal finance


Tuesday, February 01, 2022

Parkway Life REIT Review @ 1 February 2022

Basic Profile & Key Statistics

Parkway Life REIT (PLIFE) is a healthcare REIT that invests mainly in hospitals, medical centres and nursing homes. PLife owns 56 properties across Singapore, Japan and Malaysia.

Performance Highlight

For 4Q 2021, the performance has improved slightly YoY. The DPU remain the same as per previous year. 

Acquisition

In December, PLIFE has acquired another nursing home in Japan.

Related Parties Shareholding

  • REIT sponsor's shareholding is high at 35.56%
  • REIT manager's shareholding is low at 0.316%
  • Directors of REIT manager's shareholding is high at 0.16%

Lease Profile

  • Occupancy is high at 99.7%
  • WALE is long at 17.31 years
  • Highest lease expiry within 5 years is low at 2.3% which falls in 2026
  • Weighted Average Land Lease Expiry is slightly long at 73.71 years

Debt Profile

  • Gearing ratio is slightly low at 35.4%
  • Cost of debt is low at 0.52%
  • Fixed rate debt % is slightly low at 70%
  • All debts are unsecured debt
  • WADM is long at 3.9 years
  • Highest debt maturity within 5 years is low at 22% which falls in 2026
  • Interest coverage ratio is high at 21.5 times

Diversification Profile

  • Top geographical contribution is high at 59.2% 
  • Top property contribution is high at 35.6% 
  • Top 5 properties contribution is moderate at 63% 
  • Top tenant contribution is high at 59.2% 
  • Top 10 tenants contribution is high at 85%

Key Financial Metrics

  • Property yield is slightly high at 5.3% 
  • Management fees over distribution is slightly high at 15.1% in which unitholders receive S$ 6.62 for every dollar paid 
  • Distribution on capital is high at 4.1%
  • Distribution margin is high at 70.6%

Trends

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

Relative Valuation

  • P/NAV - Below average for 1y; Above average for 3y; Above +1SD for 5y
  • Dividend Yield - Below average for 1y; Below -1SD for 3y and 5y

Author's Opinion

 Favorable Less Favorable
High REIT Sponsor's ShareholdingLow REIT Manager's Shareholding
High Directors of REIT Manager's ShareholdingHigh Top Geographical Contribution
High OccupancyHigh Top Property Contribution
Long WALEHigh Top Tenant & Top 10 Tenants Contributions
No Major Lease Expiry within 5 YearsProperty Yield Downtrend
Low Cost of DebtDistribution on Capital Downtrend
100% Unsecured Debt 
Long WADM 
Well Spread Debt Maturity 
High Interest Coverage Ratio 
High Distribution on Capita 
High Distribution Margin 
DPU Uptrend 
NAV per Unit Uptrend 
Interest Coverage Ratio Uptrend

As always, PLIFE provided a consistent good result and maintain a strong fundamentals. Together with the result announcement, PLIFE has announced that they will adopt half-yearly reporting as well as switching to semi-annual distribution starting this year. 


You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts


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*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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