Parkway Life REIT (PLife REIT) 1H 2025 Financial Analysis: Sustained Growth and Strategic Expansion
Parkway Life Real Estate Investment Trust (PLife REIT), one of Asia’s largest listed healthcare REITs, released its business update for the first half of 2025. The report highlights robust financial performance, ongoing portfolio expansion into Europe, and prudent financial risk management. Below, we analyze the key financial metrics, portfolio developments, and strategic outlook, providing investors with a comprehensive perspective on the REIT’s trajectory.
Key Financial Metrics
- Gross Revenue (1H 2025): S\$78.3 million (up 8.1% YoY)
- Net Property Income (NPI): S\$73.8 million (up 8.0% YoY)
- Distributable Income (DI): S\$49.9 million (up 9.5% YoY)
- Distribution Per Unit (DPU): 7.65 cents (up 1.5% YoY)
- Gearing: 35.4% (ample headroom below new 50% cap)
- Interest Cover: 9.1 times
- All-in Debt Cost: 1.50%
- Net Asset Value (NAV) per unit: S\$2.44
- Unit Price (30 June 2025): S\$4.10 (68% premium to NAV)
Financial Performance Table
| Metric |
1H 2025 |
2H 2024 |
1H 2024 |
YoY Change |
QoQ Change |
| Gross Revenue (S\$’000) |
78,308 |
— |
72,420 |
+8.1% |
— |
| Net Property Income (S\$’000) |
73,844 |
— |
68,355 |
+8.0% |
— |
| Distributable Income (S\$’000) |
49,923 |
— |
45,609 |
+9.5% |
— |
| DPU (cents) |
7.65 |
— |
7.54 |
+1.5% |
— |
| Proposed Dividend (cents) |
7.65 |
— |
7.54 |
+1.5% |
— |
Historical Performance Trends
PLife REIT has demonstrated uninterrupted growth in recurring DPU since IPO, achieving a total DPU increase of 136.1%. The trust has also outperformed the S-REIT Index and has kept pace with the broader STI Index, reflecting market confidence in its consistent returns and defensive healthcare portfolio.
Portfolio Developments and Expansion
- Portfolio Size: 75 properties across Singapore, Japan, France, and Malaysia, valued at S\$2.46 billion.
- Recent Acquisitions:
- One nursing home in Japan (August 2024)
- 11 freehold nursing homes in France (December 2024), operated by DomusVi, a leading pan-European healthcare operator under a favorable 12-year sale and leaseback arrangement
- Singapore Portfolio: Three core hospitals (Mount Elizabeth, Gleneagles, Parkway East) on a new 20.4-year master lease with step-up rent features and 100% committed occupancy.
- Japan Portfolio: 60 nursing homes, 96% revenue downside-protected, long-term leases, and a diversified tenant base.
- France Portfolio: 11 nursing homes, 100% occupancy, long weighted average lease expiry, and strong operator covenant.
- Malaysia (pending divestment): Medical centre asset with 31% occupancy.
Exceptional and One-Off Items
- Tax Exemption: IRAS approval for tax exemption on foreign-sourced dividend income from the France portfolio and interest income for 7 of 11 French properties, resulting in an estimated full-year tax saving of S\$1.26 million (about 1.3% of 2024’s DPU).
- Asset Recycling: Ongoing divestment of Malaysian strata units and active pursuit of asset optimization and recycling in Japan and France.
- Foreign Exchange and Hedging: Effective hedging strategies for JPY and EUR assets and income, minimizing currency risks through natural and synthetic hedges.
Capital and Financial Management
- Debt Maturity: No long-term refinancing needs until September 2026; weighted average term to maturity of 3.0 years.
- Hedging: About 97% of interest rate exposure hedged as of June 2025.
- Gearing: 35.4%, with substantial headroom (up to S\$762.4 million before reaching the 50% regulatory cap).
- Equity Fundraising: 47.37 million new units issued in November 2024 to fund acquisitions.
Macroeconomic and Regulatory Events
- Tax Policy Changes: The Singapore tax authority’s approval for tax exemption on certain foreign income supports distributable income for unitholders.
- Regulatory Changes: The S-REIT gearing limit increased to 50% from November 2024.
Forecasts and Strategic Outlook
- Growth Strategy: Continued focus on core Singapore market, strategic expansion in Japan and France, and potential entry into other European and UK healthcare markets.
- Partnerships: Emphasis on building long-term relationships with quality operators (e.g., DomusVi in France, various leading healthcare operators in Japan).
- Asset Pipeline: Right of first refusal over Mount Elizabeth Novena Hospital (Singapore) and active pursuit of further accretive acquisitions.
Conclusion: Strong and Sustainable Performance
PLife REIT’s 1H 2025 results reinforce its reputation as a resilient, defensive, and growth-oriented healthcare REIT. The trust delivered steady YoY increases in revenue, NPI, distributable income, and DPU, driven by portfolio expansion and effective cost control. Prudent capital management, substantial debt headroom, and robust hedging strategies position PLife REIT to weather macroeconomic uncertainties. With uninterrupted DPU growth since IPO and a clear path for further expansion in Asia-Pacific and Europe, PLife REIT’s outlook remains strong, underpinned by stable cash flows, long-term leases, and a diversified, high-quality portfolio.
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