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 Shareholding	Low REIT Manager's Shareholding
High Directors of REIT Manager's Shareholding	High Top Geographical Contribution
High Occupancy	High Top Property Contribution
Long WALE	High Top Tenant & Top 10 Tenants Contributions
No Major Lease Expiry within 5 Years	Property Yield Downtrend
Low Cost of Debt	Distribution 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.