Parkway Life REIT (PREIT) has announced an 8.1% year-on-year increase in revenue for the first half of 2025, reaching S$78.3 million, with net property income (NPI) also up by 8% to S$73.8 million. This growth is attributed to acquisitions in France and Japan, alongside enhanced lease arrangements in Singapore. The distribution per unit (DPU) increased by 1.5% to 7.65 Singapore cents, supported by an equity fundraising exercise that facilitated the purchase of 11 properties in France.
The REIT’s financial performance was bolstered by a strong operating and capital structure, with Singapore contributing 64.8% of total revenue, CGS International said in a report.
Overseas operations in Japan and France accounted for 35.2% of revenue. PREIT has implemented foreign exchange hedges to mitigate currency volatility, resulting in a forex gain of S$4.35 million in the first half of the year. Additionally, tax exemptions approved by the Inland Revenue Authority of Singapore for foreign-sourced income from its French properties are expected to yield annual tax savings of approximately S$1.26 million.
PREIT’s gearing ratio stood at 35.4% at the end of the first half, with 97% of its interest rate exposure hedged into fixed rates. The REIT plans to optimise its asset portfolio by divesting non-core assets and reinvesting in strategic opportunities, particularly in France, whilst maintaining its core market in Singapore.
The REIT has reiterated its “Add” rating, raising its target price to S$4.93, reflecting the anticipated benefits from tax savings and potential accretive acquisitions. However, risks such as deflationary pressures and potential capital expenditure overruns at Mount Elizabeth Hospital remain considerations for investors.
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