PARKWAY Life Reit : C2PU 0% posted a distribution per unit (DPU) of S$0.0379 for the first quarter of 2024, up 4 per cent from S$0.0365 a year ago.

The healthcare real estate investment trust (Reit) pays out distributions semi-annually, and the Q1 DPU will form part of its distribution for the first half of this year.

Overall, gross revenue declined 2.7 per cent to S$36.3 million, from S$37.3 million in Q1 2023, its manager said in a Tuesday (Apr 30) bourse filing. Meanwhile, net property income slipped 2.8 per cent to S$34.3 million, from S$35.3 million previously.

The falls were mainly due to depreciation of the Japanese yen, said the manager.

But it added: “As the Reit has hedged the net income from Japan, the drop in revenue will be compensated by the FX (foreign exchange) gains from the settlement of the forward contracts.”

It also noted higher distributable income from Singapore hospitals and some Japanese nursing homes with step-up lease arrangements.

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Finance costs increased 4.4 per cent to S$2.6 million, from S$2.5 million, on the back of capital expenditure (capex), new acquisitions in 2023, and higher interest costs from Singapore dollar and Japanese yen debts, partially offset by the depreciation of the yen.

Notwithstanding this, the manager said interest costs on loans drawn down to fund capex have no distribution impact, as they are not subject to deduction when computing distributable income to unitholders.

Its balance sheet and capital structure remain “strong”, with no long-term debt refinancing needed until March 2025.

As at Mar 31, 2024, all-in debt cost was “low” at 1.3 per cent, while gearing stood at 36.4 per cent with an interest cover of 11.1 times.

On its management of the Reit’s financial risk, the manager said that prinicpal FX risk is mitigated, as Japanese yen acquisitions are fully funded by yen loans.

Income FX risk is mitigated with yen net income hedges in place until Q1 2029, it said, adding that about 91 per cent of its interest rate exposure is hedged.

Units of Parkway Life Reit closed S$0.05 or 1.4 per cent higher at S$3.59 on Tuesday, before the business update.