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

Executive summary

• Distributable income rose 3.5% year-over-year to S$45.6 million for 1H 2024, with DPU up 3.5% to 7.54 cents per unit, supported by FX hedges, step-up leases, and new property contributions.

• 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.

• Portfolio remains defensive and resilient 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 S$3.50.

• Portfolio size reached S$2.23 billion, comprising 63 properties.

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.

• Finance costs increased 7.3% year-over-year due to higher interest rates and new acquisitions.

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

• Cash and cash equivalents increased to S$57.1 million from S$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, ensuring rental stability and growth.

• 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, supporting long-term growth.