Parkway Life REIT FY2025 Financial Results: Solid Performance and Continued Growth

Parkway Life Real Estate Investment Trust (PLife REIT) has released its audited financial statements for the year ended 31 December 2025. The REIT, known for its healthcare-focused portfolio spanning Singapore, Japan, France, and Malaysia, continued to deliver robust results. Below, we analyze the key financial metrics, performance trends, dividend history, and notable corporate developments, providing insights for investors and market watchers.

Key Financial Metrics and Performance Summary

Dividend Summary

Historical Performance Trends

PLife REIT has demonstrated steady, resilient growth, supported by a high-quality healthcare portfolio. Notably, both gross revenue and net property income posted healthy increases, with net property income rising 8.0% year-on-year. The total return surged by 60.8%, largely due to positive fair value changes in investment properties and strong operational performance. Distribution per unit continued its upward trend, rising 2.5% to 15.29 cents for FY2025.

Assets, Revaluation, and Portfolio Updates

• Investment Properties: The portfolio was independently valued at \$2.57 billion, up from \$2.46 billion in FY2024, reflecting both acquisitions and positive revaluation gains.
• Fair Value Gains: Net change in fair value of investment properties was a gain of \$42.03 million, compared to a loss of \$18.04 million the previous year, indicating market recovery and/or accretive investments.
• Geographical Diversification: The REIT continues to diversify across Singapore, Japan, France, and Malaysia, with notable additions in France and Japan in the past year.

Capital Management and Fundraising Activities

• Leverage: Aggregate leverage decreased to 33.4%, well within regulatory limits and providing ample headroom for future acquisitions.
• Interest Coverage: ICR remains strong at 8.6x, ensuring ample buffer against rising interest rates.
• Fundraising: No new units were issued in 2025; previous year saw a private placement raising \$180 million to fund European expansion.

Management and Trustee Statements

Both the Manager and Trustee confirmed compliance with all regulatory, trust deed, and accounting standards. No errors or inconsistencies were reported in the audit process.

Exceptional Items and Noteworthy Events

• Allowance for Doubtful Debts: An allowance of \$0.5 million was recognized in 2024 due to a Japanese nursing home operator defaulting, with no new material impairments in 2025.
• Gain on Disposal: \$0.12 million gain on disposal of an investment property was recognized in 2025.

Directors’ Remuneration

Management fees totaled \$15.70 million in 2025, up 8% from 2024, reflecting both higher asset values and performance fees. There were no extraordinary payments or unusual increases in director remuneration.

Risk Management and Outlook

• Interest and FX Hedging: The REIT maintains an active hedging program, with over 50% of borrowings hedged through interest rate swaps and caps, and uses currency hedges to mitigate JPY/EUR volatility.
• Liquidity: Ample undrawn committed facilities (\$60 million) and strong operating cash flow support ongoing commitments and distributions.
• Tax and Regulatory: No adverse tax or regulatory changes were reported.

Chairman’s Statement

(No explicit Chairman’s Statement was included in the provided report.)

Conclusion & Investment Recommendations

Parkway Life REIT delivered a robust set of results in FY2025, marked by strong growth in both earnings and distributions, prudent capital management, and portfolio expansion. Asset values appreciated, and the balance sheet remains well-capitalized with low leverage and high interest coverage. Risks are well-managed, and the outlook appears stable.

• If you currently hold PLife REIT: The REIT’s stable and growing distributions, resilient portfolio, and conservative balance sheet support a “hold” recommendation. Investors may consider accumulating on weakness, especially as the REIT continues to demonstrate strong fundamentals and prudent risk management.
• If you do not currently hold PLife REIT: The REIT offers a defensive profile with consistent yield and growth potential in the healthcare space. New investors seeking stable income and diversification into healthcare real estate may consider initiating a position, especially given its track record and disciplined financial management.

Disclaimer: The above does not constitute investment advice. Investors should conduct their own due diligence and consider their risk tolerance and investment objectives before making any investment decisions. Past performance is not indicative of future results.

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