REIT-TIREMENT - REITs Investing & Personal Finance

REITs investment & personal finance


Sunday, May 08, 2022

Parkway Life REIT Review @ 8 May 2022

Basic Profile & Key Statistics
  • Main Sector(s): Healthcare
  • Country(s) with Assets: Singapore, Japan & Malaysia
  • No. of Properties (exclude development/associate/fund): 56

Performance Highlight

Gross revenue and NPI have increased yoy due to contributions from nursing homes that were acquired in 2H 2021 but partially offset by the divestment of PLife Matsudo and depreciation of JPY.    

Related Parties Shareholding

  • REIT sponsor's shareholding: Above median for more than 20%
  • REIT manager's shareholding: Below median for more than 20%
  • Directors of REIT manager's shareholding: Above median for more than 20%

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: Above median for more than 20%
  • Highest lease expiry within 5 years: Below median for more than 20%; Falls in 2026
  • Weighted average land lease expiry: ± 10% from median

Debt Profile

  • Gearing ratio: ± 10% from median
  • Cost of debt: Below median for more than 20%
  • Fixed rate debt %: Above median for more than 10%
  • Unsecured debt %: 100% Unsecured Debt
  • WADM: Above median for more than 20%
  • Highest debt maturity within 5 years: Below median for more than 20%; Falls in 2026
  • Interest coverage ratio: Above median for more than 20%

Diversification Profile

  • Top geographical contribution: Above median for more than 10%
  • Top property contribution: Above median for more than 20%
  • Top 5 properties' contribution: ± 10% from median
  • Top tenant contribution: Above median for more than 20% 
  • Top 10 tenants' contribution: Above median for more than 20%

Key Financial Metrics

  • Property yield: ± 10% from median
  • Management fees over distribution: ± 10% from median; $6.62 distribution for every dollar paid 
  • Distribution on capital: Above median for more than 10%
  • Distribution margin: Above median for more than 20%

Trends

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

Relative Valuation

  • P/NAV: Average for 1y; Above average for 3y; Above +1SD for 5y
  • Dividend Yield: Average for 1y; Below -1SD for 3y & 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
High Fixed Rate Debt % 
100% Unsecured Debt 
Long WADM 
Well Spread Debt Maturity 
High Interest Coverage Ratio 
High Distribution on Capital 
High Distribution Margin 
DPU Uptrend 
NAV per Unit Uptrend 
Interest Coverage Ratio Uptrend

Despite the depreciation of JPY (which started in March 2022), PLIFE is able to maintain a sight performance growth. From the latest annual report, PLIFE has extended hedging of the Japanese Yen forward exchange contracts till 3Q 2026. This should minimize the forex risk of income from Japanese properties, which accounted for around 40% of income.


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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