Parkway Life REIT 3Q 2025: Robust Performance, Strategic Acquisitions, and Portfolio Optimisation Signal Growth Ahead

Key Highlights for Investors

• Gross Revenue up 8.2% YoY; Distributable Income up 10.4%
• Strategic Expansion into Europe with €111.2m Acquisition of 11 French Nursing Homes
• Successful Divestment of Malaysian Assets for S\$6.1m
• Secured Long-Term JPY Loan, No Major Refinancing Needs Until October 2026
• Steady DPU Growth – 11.56 cents YTD 3Q 2025 (+2.3% YoY)
• Strong Total Return Since IPO: 388%
• Portfolio now spans Singapore, Japan, and France, with diversified tenant base and long-term leases
• Debt headroom remains healthy with 35.8% gearing

Financial Performance: Strong Growth and Resilience

Parkway Life REIT (“PLife REIT”) delivered yet another set of robust results for 3Q 2025, underscored by disciplined capital management and strategic acquisitions. Gross revenue for YTD 3Q 2025 reached S\$117.3 million, up 8.2% year-on-year, while net property income climbed 8.1% to S\$110.7 million. Distributable income grew 10.4% to S\$75.4 million, driven by contributions from new nursing homes in Japan and France, as well as step-up lease arrangements in Singapore hospitals. The enlarged unit base from the recent equity fund raising exercise also supported a 2.3% increase in Distribution Per Unit (DPU) to 11.56 cents.

Debt and Capital Structure: Proactive Management, Extended Maturity

The REIT’s financial position remains solid, with a low all-in debt cost of 1.57%, interest cover of 8.9x, and gearing at 35.8%. A key development was the successful refinancing of close to one-third of loans due in 2026 via a new 7-year JPY loan, extending the weighted average debt term to 3.2 years and eliminating major refinancing needs until October 2026. Approximately 86% of interest rate exposure is hedged, and principal FX risks are mitigated through natural hedges and currency swaps.

Strategic Portfolio Optimisation: Malaysia Divestment & European Expansion

PLife REIT completed the divestment of its Malaysia portfolio for RM20.09 million (S\$6.09 million) in August 2025, in line with its ongoing asset recycling and value unlocking strategy. Notably, the REIT made its first foray into Europe with the acquisition of 11 freehold nursing homes in France for €111.2 million (S\$157.3 million), operated by DomusVi Group under a 12-year indexed lease. This move not only diversifies the portfolio geographically but also secures long-term income streams from high-quality assets in a growing healthcare market.

Portfolio Overview: Quality, Diversification, and Defensive Lease Structures

With a total portfolio size of S\$2.46 billion, PLife REIT now owns 74 properties across Singapore, Japan, and France. The weighted average lease to expiry stands at 14.68 years (by gross revenue), with 90.3% of revenue protected by downside clauses. Singapore hospitals (Gleneagles, Parkway East, Mount Elizabeth) continue to anchor the portfolio, backed by a 20.4-year master lease renewal term and step-up rent structure. The Japan portfolio boasts 60 nursing homes with 97.7% occupancy, most featuring “up only” rental reviews, security deposits, and back-up operator arrangements. The new French portfolio adds further stability with 100% occupancy and long indexed leases.

Growth Strategy: Multi-Pronged Approach for Sustainable Expansion

PLife REIT’s strategy centers on targeted investments, partnership and clustering approaches, proactive asset management, and dynamic capital management. The REIT aims to deepen its presence in existing markets (Singapore and Japan), build on its foothold in France, and explore further expansion into other European and mature healthcare markets. Strategic partnerships, including collaboration with sponsor IHH Healthcare and leading operators, will drive long-term growth.

Price-Sensitive Developments for Shareholders

• Successful acquisition in France marks a strategic entry into a new market, enhancing long-term income visibility and diversification.
• Refinancing of loans removes major debt maturity risk until October 2026, reducing the likelihood of equity dilution or adverse refinancing terms.
• Malaysia divestment streamlines the portfolio for higher-yielding assets and could unlock further value for investors.
• Steady DPU growth and a strong total return of 388% since IPO demonstrate resilience and attractive returns for unitholders.
• Inclusion in new SGX iEdge indices may increase liquidity and institutional interest, supporting future price performance.

Unit Price Performance and Total Return

PLife REIT’s unit price, at \$4.12 as at 30 September 2025, trades at a significant premium to NAV (71%). Despite underperforming the STI Index in 3Q 2025, the REIT outperformed the S-REIT Index and delivered a total return of 388% since IPO, reflecting both capital appreciation and cumulative distributions of \$2.12 per unit.

Conclusion: Parkway Life REIT Poised for Sustained Growth and Stability

With prudent capital management, strategic acquisitions, and defensive lease structures underpinning stable and growing income streams, Parkway Life REIT remains well-positioned for long-term growth. The recent entry into Europe, extended debt maturity profile, and ongoing asset optimisation are price-sensitive factors that could further support its share value. Investors should closely monitor the REIT’s execution of its growth strategy, as continued expansion and disciplined risk management may unlock additional value in the quarters ahead.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Investors should conduct their own research and consult with qualified financial advisors before making any investment decisions. Past performance is not indicative of future results. The information herein reflects the latest available data as of the reporting date and may be subject to change.

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