Differing results for health care-based Reits

TWO health care-based real estate investment trusts (Reits) produced differing full-year report cards yesterday – one was in the pink of health, while the other was just holding steady.

Parkway Life (PLife) Reit reported a double-digit gain in distribution income while that of First Reit was flat.

PLife’s distributable income jumped 11.6 per cent to $12.4 million in the fourth quarter ended Dec 31 last year.

For the full year, PLife’s distributable income shot up by 13.4 per cent to $46.7 million.

Its distribution per unit (DPU) also rose in both the fourth quarter and full year, recording 2.05 cents and 7.74 cents respectively. This translates into a 6.34 per cent distribution yield for the full year 2009, based on the closing price of $1.22 at Dec 31.

Gross revenue rose by 9.7 per cent in the fourth quarter to $17.7 million and 23.7 per cent to $66.7 million in the full year.

The strong performance was mainly due to acquisition of eight new nursing homes in Japan in 2008 and higher rent from the Singapore Hospital Properties.

Said chief executive Yong Yean Chau: ‘We were able to time the market and acquire quality properties in the fourth quarter at a very attractive pricing.’

PLife Reit also enjoyed growth in its net property income, rising 23.1 per cent to $62 million for the full year.

By contrast, First Reit’s full-year statement showed little growth.

Its fourth-quarter distributable income dipped by 0.6 per cent to $5.3 million. The full year, however, recorded a rise of 0.6 per cent to $21 million.

First Reit’s DPU remained steady at 1.92 cents in the fourth quarter and 7.62 cents in the full year.

Based on its closing price of 86 cents on Wednesday, the distribution yield stands at 8.86 per cent, down 49.4 per cent from the year before.

Quarterly gross revenue rose by 1.4 per cent to $7.7 million in the fourth quarter and 0.7 per cent to $30.2 million for the full year.

Net property income also recorded slight growth, up 1.2 per cent for the quarter to $7.6 million and up 0.3 per cent to $29.9 million for the full year.

Both trusts remain upbeat about their prospects this year despite the relatively uncertain economic outlook.

Source: Straits Times, 23 Jan 2010