REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Thursday, November 09, 2023

Parkway Life REIT Review @ 9 November 2023

Basic Profile & Key Statistics
  • Main Sector(s): Healthcare
  • Country(s) with Assets: Singapore, Japan & Malaysia
  • No. of Properties (exclude associate/fund): 63

Key Indicators

Performance Highlight
YTD, gross revenue and NPI increased significantly YoY mainly due to contributions from nursing homes acquired in Sep 2022 and the straight-lining of rental. Distributable income to unitholders and DPU have improved YoY as a result of the improvement above.

Plife acquired 2 Japan nursing homes on 27 October.

Related Parties Shareholding

  • REIT Sponsor's Shareholding: Above median by 20% or more
  • REIT Manager's Shareholding: Below median by 20% or more
  • Directors of REIT Manager's Shareholding: Above median by 20% or more

Lease Profile

  • Committed Occupancy: ± 5% from median
  • WALE: Above median by 20% or more
  • Highest Lease Expiry within 5 Years: Below median by 20% or more; Falls in 2026
  • Weighted Average Land Lease Expiry: ± 10% from median

Debt Profile

  • Gearing Ratio: ± 10% from median
  • Cost of Debt: Below median by 20% or more
  • Fixed Rate Debt %: ± 10% from median
  • Unsecured Debt %: 100%
  • WADM: ± 10% from median
  • Highest Debt Maturity within 5 Years: Below median by 20% or more; Falls in 2027
  • Interest Coverage Ratio: Above median by 20% or more

Diversification Profile

  • Top Geographical Contribution: Above median by 10% or more
  • Top Property Contribution: Above median by 20% or more
  • Top 5 Properties' Contribution: ± 10% from median
  • Top Tenant Contribution: Above median by 20% or more
  • Top 10 Tenants' Contribution: Above median by 20% or more

Key Financial Metrics

  • Property Yield: Above median by 20% or more
  • Management Fees over Operating Distributable Income: ± 10% from median; $6.33 distribution for every dollar paid 
  • Operating Distributable Income on Capital: Above median by 20% or more
  • Operating Distributable Income Margin: Above median by 20% or more
  • Operating Distribution Proportion: 100%

DPU Breakdown

  • TTM DPU Breakdown
    • 100% from Operation
  • TTM DPU = 96.7% of Distributable Income


  • Uptrend: DPU from Operation, NAV per Unit, Interest Coverage Ratio
  • Slight Uptrend: Property Yield
  • Flat: Committed Occupancy
  • Downtrend: Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

  • Dividend Yield: Above +2SD for 1y & 3y; Above +1SD for 5y
  • P/NAV: Below -2SD for 1y & 3y; Below -1SD for 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 Committed OccupancyHigh Top Property Contribution
Long WALEHigh Top Tenant & Top 10 Tenants' Contributions
No Major Lease Expiry within 5 YearsOperating Distributable Income on Capital Downtrend
Low Cost of DebtOperating Distributable Income Margin Downtrend
100% Unsecured Debt 
Well Spread Debt Maturity 
High Interest Coverage Ratio 
High Property Yield 
High Operating Distributable Income on Capital 
High Operating Distributable Income Margin 
100% Operating Distribution Proportion 
DPU from Operation Uptrend 
NAV per Unit Uptrend 
Interest Coverage Ratio Uptrend

While gross revenue and NPI in the current quarter are lower compared to the previous quarter, DPU has increased. This increase can likely be attributed to foreign exchange gain from currency exchange forward contracts. On the debt front, there is a 10% maturity in 4Q 2023 which has grown due to the drawdown of short-term loans for capital expenditures and working capital, as well as a 16% maturity in 2024. The impact of interest costs should remain minimal with 74% of fixed-rate debt, coupled with the prevailing low interest rates in Japan.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.

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