Parkway Life Real Estate Investment Trust (C2PU) H1 2024 earnings summary

Executive summary

• Gross revenue for 1H 2024 declined 2.7% year-over-year to S$72.4 million, mainly due to Japanese Yen depreciation, partially offset by new property contributions.

• Distributable income rose 3.5% year-over-year to S$45.6 million, with DPU at 7.54 cents, supported by FX hedges and step-up lease arrangements.

• Portfolio remains defensive with long-term leases, high occupancy, and diversified assets across Singapore, Japan, and Malaysia.

• Annualised DPU reached 15.08 cents, with a distribution yield of 4.31% based on a closing price of $3.50.

Financial highlights

• Net property income for 1H 2024 was S$68.4 million, down 2.5% year-over-year.

• Net asset value per unit stood at S$2.35 as of 30 June 2024, with unit price at S$3.50, a 48.9% premium to NAV.

• Total return after tax before distribution was S$51.8 million, up 9.3% year-over-year.

• Earnings per unit: 8.57 cents (up from 7.84 cents); DPU: 7.54 cents (up from 7.29 cents).

• Cash and cash equivalents increased to $57.1 million from $28.5 million at end-2023.

Outlook and guidance

• FX and interest rate risks are well-hedged, with JPY income hedges in place until 1Q 2029 and 90% of interest rate exposure hedged.

• No long-term debt refinancing needs until March 2025; ample debt headroom for future growth.

• Portfolio supported by 98.6% downside revenue protection and 65.4% CPI-linked leases.

• Growth strategy focuses on strengthening existing markets, building a third key market, and fostering strategic partnerships.

• Healthcare sector demand remains robust due to aging population, positioning for continued growth.