Parkway Life Real Estate Investment Trust (REIT), one of Asia’s largest healthcare REITs, is poised for substantial growth following strategic acquisitions and lease renewals, a DBS Group Research report said. The REIT reported a 1.5% year-on-year increase in its distribution per unit (DPU) for the first half of 2025, meeting expectations. This growth is attributed to the acquisition of nursing homes in France and Japan, alongside increased rental contributions from Singapore hospitals.
The REIT’s recent activities include the renewal of Singapore hospitals’ master lease, which is expected to bring a 40% rent increment and a 20-year extension starting in 2026. This renewal is projected to boost the DPU by nearly 20% and yield close to 4.5%. Additionally, the REIT’s acquisition of nursing homes in France is anticipated to accelerate near-term growth.
Parkway Life REIT’s strategy includes reducing concentration risk in Japan by potentially divesting 10%-15% of its assets there. The REIT plans to reinvest proceeds into more promising markets like Singapore and Europe. The potential acquisition of Mount Elizabeth Novena Hospital remains a significant growth catalyst, with DBS Group Research maintaining a “BUY” recommendation and a target price of $3.50 (SGD 4.75).
The REIT’s low leverage ratio provides ample debt headroom for further acquisitions, reinforcing its position in Singapore’s private hospital market. With a projected FY26 yield of close to 4.5%, Parkway Life REIT is well-positioned for sustainable DPU growth through its strategic initiatives.
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