Parkway Life Real Estate Investment Trust · SGX:C2PU
Parkway Life Real Estate Investment Trust — Investor Presentation (February 2012)
43 slides from Parkway Life Real Estate Investment Trust's investor presentation, Feb 2, 2012
Slide 1: Investor Relations Presentation 2 February 2012
(“PLife REIT”) INVESTOR RELATIONS PRESENTATION 2 February 2012
Slide 2: Disclaimer
Disclaimer This document is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in Parkway Life Real Estate Investment Trust (“Parkway Life REIT” and the units in Parkway Life REIT, the “Units”). The value of the Units and the income derive
Slide 3: Agenda
Agenda 1. Overview of PLife REIT 2. Our Properties 3. Growth Strategy & Core Markets 4. Capital & Financial Management 5. Appendix 3
Slide 4: 1. Overview of PLife REIT
(“PLife REIT”) 1. Overview of PLife REIT 4
Slide 5: PLife REIT Portfolio (as at 31 December 2011)
PLife REIT Portfolio (as at 31 December 2011) Largest listed healthcare REIT in Asian region with an enlarged portfolio of S$1.38 billion1 Core Strengths: Defensive long term lease structure with downside protection Stable income stream supported by regular rental revision Diversified portfoli
Slide 6: Strong Financial Growth
Strong Financial Growth Increasing year-on-year Gross Revenue and Net Property Income Contributed by: Increased rental revenue from Japan properties and Upward minimum guarantee rent revision of Singapore properties for Year 5 of lease term commencing 23 Aug 2011 +9.6% +9.6% +9.1% S$’000 S$,000
Slide 7: Strong Distribution Income Growth
Strong Distribution Income Growth Increasing year-on-year Distributable Income +9.2% +9.2% S$’000 60,000 58,051 53,173 50,000 40,000 30,000 20,000 10,000 0 FY 2010 FY 2011 7
Slide 8: Strong DPU Growth Since IPO
Strong DPU Growth Since IPO DPU has grown steadily from 1.59 cents to 2.47 cents, at a growth rate of 55.3% since IPO1 DPU (cents) +55.3% +55.3% 2.6 2.40 2.47 2.25 2.38 2.36 2.37 2.05 2.07 2.09 2.2 1.89 1.89 1.91 1.84 1.62 1.66 1.71 1.8 1.59 1.4 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2
Slide 9: Recent Developments
Recent Developments • Announced retention of distributable income via operating cashflow w.e.f. from FY2012 to fund recurring capex needs and reduce reliance on debt 27 Jan 2012 • To retain approximately S$3 million for FY2012 • Maintains policy to distribute at least 90% of taxable income and net o
Slide 10: 2. Our Properties
(“PLife REIT”) 2. Our Properties 10
Slide 11: Our Properties - Singapore
Our Properties - Singapore 1 A portfolio of 3 strategically-located world-class local private hospitals worth S$924 million Master Lease with Parkway Hospitals Singapore Pte. Ltd, a wholly owned subsidiary of Parkway Holdings, the largest private healthcare operator in Singapore and a key region
Slide 12: Our Properties – Singapore: Distinct Features
Our Properties – Singapore 3 Distinct features of our Singapore Hospital Properties: Long-term Master 9 15 + 15 years with effect from 23 August 2007 Leases with 9 c.f. average industry lease period of 3-5 years Parkway Hospitals 9 100% committed occupancy Singapore 9 PLife REIT does not bear these
Slide 13: Singapore Hospital Properties – Rent Review Mechanism
Singapore Hospital Properties – Rent Review Mechanism Illustration Annual Rent Review Mechanism Year 1 Year 2 (23 Aug 07 – 22 Aug 08) (23 Aug 08 – 22 Aug 09) PH to pay higher of : Base Rent + Variable Rent formula Base Rent + Variable Rent formula Base Rent + Variable Rent formula Base Rent Base + V
Slide 14: Singapore Hospital Properties – Rent Review Mechanism (cont'd)
Singapore Hospital Properties – Rent Review Mechanism (Continued from previous slide) Example: CPI + 1% kicker in the event of deflation Year 2 Rent (23 Aug 08 – 22 Aug 09) CPI + 1% formula S$47.5 million x [1 + (0+ 1)%] = In the event of negative CPI, or deflation, CPI will be reset to Minimum guar
Slide 15: Our Properties - Japan
Our Properties - Japan A portfolio of 30 high quality healthcare properties worth 1 S$460 million , comprising: 9 1 pharmaceutical product distributing and manufacturing facility P-Life Matsudo (P-Life Matsudo) 9 29 private nursing homes Master tenancy with 17 lessees Nursing Home Properties B
Slide 16: Introduction to Japan Properties – Why Japan nursing homes?
Introduction to Japan Properties – Cont’d Why Japan nursing homes? Acute aging population in Japan 9 1 in 3 Japanese to be over 65 years old by 2050 Excellent credit rating & well established laws and regulations 9 AAA rated, similar to Singapore Diversified rental sources complement Singapore
Slide 17: Our Properties - Japan: Unique Features
Our Properties - Japan 2 Unique features of our Japan assets: Favourable Lease Structure 9 Long term lease structure with weighted average lease term to expiry of 1 14.73 years 9 “Up only” Rental Review Provision for most of our nursing homes Master Tenanted 9 Signifies 100% committed occupancy
Slide 18: Our Properties – Japan: Downside-protected Revenue
Our Properties – Japan Approximately 70% of revenue from Japan portfolio is downside-protected Revenue from Japan portfolio (as at 31 December 2011) 68.7%1 Downside- protected Subject to market 31.3%2 revision Notes: 1. Based on Gross Revenue (as at 31 Dec 2011) of 19 properties 2. Based on Gross
Slide 19: Diversified Nursing Home Operators
Diversified Nursing Home Operators 16 high quality nursing home operators 9 Diversifies tenant risk Back-up operator arrangements 9 Miminises operator default risks Rental guarantee by vendors 9 For a period of seven years, capped at 5% of the purchase price for properties acquired from Kenedi
Slide 20: 3. Growth Strategy & Core Markets
(“PLife REIT”) 3. Growth Strategy & Core Markets 20
Slide 21: PLife REIT's Next Phase of Growth
PLife REIT’s Next Phase of Growth 21
Slide 22: Our Long Term Strategy
Our Long Term Strategy PLife REIT plans to undertake the following strategies: Acquisition GROWTH Strategy ASSET MANAGEMENT Strategy Third Party Acquisition Sponsor’s Acquisition • Sustain Revenue • Focused on acquiring • Focused on acquiring • Grow revenue organically quality assets from 3rd assets
Slide 23: PLife REIT's Target Markets
PLife REIT’s Target Markets Japan US$436.95bn = eG =) Taiwan US$30.0bn Australia S. Korea US$95.9bn US$61.18bn Singapore US$6.63bn Hong Kong Malaysia US$16.89bn US$9.63bn US$80.01bn Thailand US$18.67bn China Vietnam 7 USS6.3bn US$216.98bn Legend Sophistication of private healthcare sector? Indonesia
Slide 24: Country Diversification & Allocation
Country Diversification & Allocation Objective – To protect PLife REIT against concentration risks due to over- exposure in any single country Basis – Sovereign ratings by Standard & Poor's and Moody’s Country Rating Country Allocation Home Market Singapore No less than 50% AA to AAA Japan and A
Slide 25: Asset Class Diversification & Allocation
Asset Class Diversification & Allocation Objective – To protect PLife REIT against concentration risks due to over- exposure in any asset class Basis – Invest in properties used for healthcare and healthcare related purposes Diversification – The Manager plans to further diversify into other a
Slide 26: Strategic Investment Approach
Strategic Investment Approach Partnership Clustering PLife REIT is a Imperative for PLife REIT specialised REIT where: to achieve economies of scale in its countries of 1) Properties tend to be investment in order to: purposed-built (e.g. hospital, medical centre) 1) Establish a country HQ Two- for
Slide 27: 4. Capital and Financial Management
(“PLife REIT”) 4. Capital and Financial Management 27
Slide 28: Capital & Financial Management Strategy
Capital & Financial Management Strategy 5 Key principles : 1. Acquisition financing has to be long-term: at least 3 years or more END GOALS: 9 To mitigate immediate refinancing risks post-acquisition Minimise short 2. PLife REIT’s S$1.38billion1 portfolio is unencumbered term refinancing 9 Ensures
Slide 29: Debt Maturity Profile
Debt Maturity Profile As at 31 December 2011 S$ million 238.2 250.0 203.1 200.0 150.0 47.9% 100.0 50.0 40.9% 5.8 50.0 10.1% 1.1% 0.0 SGD due SGD due JPY due JPY due 2012 2013 2014 2015 Weighted average term to maturity is 2.92 years Current effective all-in cost of debt of 1.64% Interest cover
Slide 30: Ample Debt Headroom
Ample Debt Headroom Debt headroom of S$125.0 million, S$266.4 million and S$902.5 million before reaching 40%, 45% and 60% gearing respectively PLife REIT puts in place ample funding from diversified sources to support future acquisitions and growth opportunities Assets (S$ million) 1500.0 1000.
Slide 31: 5. Appendix
(“PLife REIT”) 5. Appendix 31
Slide 32: aD Se aS
aD Se aS dy TT ————— (nt team > TED Dna oo” @. Soe” ParkwayLife REIT 32
Slide 33: Our Portfolio - Singapore
Our Portfolio - Singapore Property Mount Elizabeth Hospital Gleneagles Hospital Parkway East Hospital Type Hospital and Medical Centre Land Tenure 67 years 75 years 75 years Gross Floor Area (sq m) 1 58,139 49,003 10,993 Beds 2 345 272 113 Operating theatres 3 13 12 4 30 strata units; 363 car park 1
Slide 34: Our Portfolio - Japan
Our Portfolio - Japan Property P-Life Matsudo Bon Sejour Shin-Yamashita Bon Sejour Ibaraki Pharmaceutical product distributing & Type Paid nursing home with care service manufacturing facility Land Tenure Freehold Freehold 50 years Land Area (sq m) 8,449 1,653 3,051 Net Lettable Area (sq m) 3,240 3,
Slide 35: Our Portfolio - Japan
Our Portfolio - Japan Senior Chonaikai Himawari Home Property Palmary Inn Akashi Palmary Inn Suma Makuhari Kan Kamakura Type Paid nursing home with care service Land Tenure Freehold Freehold Freehold Freehold Land Area (sq m) 5,891 2,676 2,853 1,307 Net Lettable Area (sq m) 6,562 4,539 4,361 1,689 N
Slide 36: Our Portfolio - Japan
Our Portfolio - Japan Smiling Home Medis Fureai no sono Smiling Home Medis Property Musashi Urawa Nerima Takanodai Koshigaya Gamo Type Paid nursing home with care service Land Tenure Freehold Land Area (sq m) 802 2,282 1,993 Net Lettable Area (sq m) 1,603 2,526 3,824 Number of Units (Rooms) 44 64 10
Slide 37: Our Portfolio - Japan
Our Portfolio - Japan Supercourt Takaishi- Maison de Centenaire Property Amille Nakasyo Supercourt Kadoma Hagoromo Ishizugawa Type Paid nursing home with care service Land Tenure Freehold 50 years 30 years Freehold Land Area (sq m) 2,900.58 1,517.78 2,009.95 1,111.05 Net Lettable Area (sq m) 3,259 2
Slide 38: Our Portfolio - Japan
Our Portfolio - Japan Maison de Centenaire Fiore Senior Residence Property Hapine Fukuoka Noke Iyashi no Takatsuki Kan Haruki Hirakata Type Paid nursing home with care service Land Tenure Freehold Freehold Freehold Freehold Land Area (sq m) 800.94 1,396.12 727.49 2,023.07 Net Lettable Area (sq m) 1,
Slide 39: Our Portfolio - Japan
Our Portfolio - Japan Property Sawayaka Obatake Ichibankan Sawayaka Obatake Nibankan Sawayaka Shinmojikan Paid nursing home Short stay / Paid nursing home Type with care service Day care facility with care service Land Tenure Freehold Freehold Freehold Land Area (sq m) 1,786.25 1,041.50 2,813.36 Net
Slide 40: Our Portfolio - Japan
Our Portfolio - Japan Property Sawayaka Nokatakan Sawayaka Nogatakan Sawayaka Sakurakan Sawayaka Fukufukukan Type Paid nursing home with care service Land Tenure Freehold Freehold Freehold Freehold Land Area (sq m) 5,748.31 2,707.31 6,275.83 1,841.84 Net Lettable Area (sq m) 4,565.67 3,147.13 5,044.
Slide 41: Our Portfolio - Japan
Our Portfolio - Japan Fureai no Sono Legato Higashi Property As Heim Nakaurawa Musashi Nakahara Sumiyoshi Type Paid nursing home with care service Land Tenure Freehold Land Area (sq m) 1,762 935.11 950.73 Net Lettable Area (sq m) 2,691.68 1,846.69 2,828.09 Number of Units (Rooms) 64 47 71 Year of Co
Slide 42: Our Portfolio - Japan
Our Portfolio - Japan Property Royal Residence Gotenyama Legato Katano Type Paid nursing home with care service Land Tenure Freehold Freehold Land Area (sq m) 793.84 1,139.10 Net Lettable Area (sq m) 1,560.41 1,687.5 Number of Units (Rooms) 44 49 Year of Completion 2007 2004 Committed Occupancy 100%
Slide 43: Our Portfolio - Summary
Our Portfolio - Summary Portfolio Singapore Japan Total 29 nursing homes; 3 Hospitals & medical center; 1 pharmaceutical product 29 nursing homes; Type Hospital & Medical Centre distribution & manufacturing facility 1 pharmaceutical product distributing & manufacturing facility Land Tenure 3 Leaseho
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