Parkway Life Real Estate Investment Trust · SGX:C2PU
Parkway Life Real Estate Investment Trust — 3QFY2008 Earnings Presentation
40 slides from Parkway Life Real Estate Investment Trust's earnings presentation, Nov 4, 2008
Slide 1: 3QFY2008 Results Presentation
(“PLife REIT”) 3QFY2008 Results Presentation 4 November 2008
Slide 2: Disclaimer
Disclaimer • This Presentation is focused on comparing actual results for the period from 1 July 2008 to 30 September 2008 (“3QFY2008”) versus forecasts as stated in the PLife REIT Prospectus of 7 August 2007. This shall be read in conjunction with PLife REIT 3QFY2008 Unaudited Financial Statement a
Slide 3: Agenda
Agenda 1 Financial Results Highlights 2 Acquisitions Update 3 Portfolio Highlights 4 Capital and Financial Management 5 Our Strategy 6 Unit Price Performance Since Listing 3
Slide 4: Financial Results Highlights
Financial Results Highlights 4
Slide 5: Summary financial highlights (3QFY2008)
Summary financial highlights (3QFY2008) Revenue (S$’000) +18.64% +16.31% 11,475 11,840 13,347 Japan Portfolio 11,250 +12.73% S$1,149k Singapore Portfolio Revenue higher S$12,198k than forecast 3 Q , Y r 1 M in. 3Q, Yr 2 3 Q , Y r 2 M in 3 Q , A c t ua l G ua ra nt e e F o re c a s t G ua ra nt e e *
Slide 6: Actual performance (3QFY2008) exceeded forecast
Actual performance (3QFY2008) exceeded forecast (DPU exceeded forecast by 9.57%) Consolidated Income Statement 01 Jul to 30 Sept 2008 Variance (S$’000) Actual Forecast¹ S$’000 % Gross Rental Revenue 13,347 11,475 1,872 16.31 Property Expenses (877) (652) 225 34.51 Net Property Income 12,470 10,823 1
Slide 7: Actual performance (YTD3QFY2008) exceeded forecast
Actual performance (YTD3QFY2008) exceeded forecast (DPU exceeded forecast by 6.59%) Consolidated Income Statement 01 Jan to 30 Sept 2008 Variance (S$’000) Actual Forecast¹ S$’000 % Gross Rental Revenue 37,709 34,425 3,284 9.54 Property Expenses (2,422) (1,954) 468 23.95 Net Property Income 35,287 32
Slide 8: 3QFY2008 Gross revenue (Singapore Hospitals) higher than minimum guarantee and forecast
3QFY2008 Gross revenue (Singapore Hospitals) was 8.4% higher than the 3Q, FY 2007 minimum guaranteed rent and 6.3% higher than forecast respectively + 8.4% + 6.3% 12.20M 11.48M 11.84M + 3.0% 11.25M Variable . 3.8% of Rent Adjusted Prorated 4.7 Hospital Min. forecast per Min. Revenue guaranteed Proje
Slide 9: 3QFY2008 Gross Revenue (Singapore Hospitals) – Breakdown by 3 Hospitals
3QFY2008 Gross Revenue (Singapore Hospitals) – Breakdown by 3 Hospitals + 8.4% S$'000 + 6.3% + 3.0% 14,000 11,840 11,475 12,198 12,000 11,250 10,000 + 2.7% 8,000 + 22.3% 7,425 7,425 7,625 7,625 + 14.8% 6,000 + 9.8% 3,620 3,975 3,463 + 4.0% 4,000 3,250 + 1.9% + 0.5% 2,000 575 587 595 598 - Gleneagles
Slide 10: 3Q FY2008 Expenses
3Q FY2008 Expenses Singapore Portfolio Property Expenses as a percentage of Gross rental Property Expenses (S$’000) Gross Rental (S$’000) 12,198 11,475 762 734 754 652 754 652 6.2% 5.7% 1Q, 08 Actual 2Q, 08 Actual 3Q, 08 Actual 3Q, 08 Forecast 3Q, 08 Actual 3Q, 08 Forecast Actual property level ex
Slide 11: 3Q 2008 Expenses – Japanese Portfolio
3Q 2008 Expenses Japanese Portfolio (S$’000) 1,149 Gross Rental Property level Revenue expenses (123) 1,149 Q3, 08 Actual Japanese property expenses were S$123,000, representing just 10.7% of gross rental revenue. Japanese property level expenses comprises property taxes and public charges for build
Slide 12: Distributable Income exceeds minimum guaranteed rent and forecast
Distributable Income exceeds 3Q, Year 1 minimum guaranteed rent and forecast by 12.3% and 9.6% respectively Distributable Income (S$’000) Japan Revenue (S$’000) + 12.3% Portfolio + 9.6% + 5.5% 308 11,475 11,840 13,347 11,250 10,004 10,312 9,186 9,411 9,776 3Q, Yr 1 Min. 3Q, Yr 2 3Q, Yr 2 Min 3Q, Act
Slide 13: Strong Balance Sheet
Strong Balance Sheet As at 30 As at 31 Consolidated Balance Sheet September December Variance Commentary (in S$’000) 2008 2007 Increase is due to investment in 10 Investment Properties 1,018,133 831,570 Japan properties. Decrease is mainly due to the use of Current Assets 16,644 26,654 cash as parti
Slide 14: Distribution Details
Distribution Details Distribution per unit Stock Counter Distribution Period (Cents) PLife REIT 01 July 2008 to 30 September 2008 1.71 Distribution Timetable Ex-Date: 10 November 2008, 9.00am (Units will be traded ex-date) Books Closure Date: 12 November 2008 at 5pm Distribution payment Date: 05 Dec
Slide 15: Acquisitions Update
Acquisitions Update o--, So” | ParkwayLife REIT 15 ee
Slide 16: Acquisition Update – Asset Diversification
Acquisition Update - Asset Diversification Pharmaceut ical Medical Office, Facilit y, 4% Nursing Home, 19% 15% Portfolio Diversification M edical Of f ice, 19% Hospit al, 62% Hospital, 81% 3Q, 2007 3Q, 2008 • Within nine months, we have achieved our goal to diversify our assets to include additional
Slide 17: Diversification by location, asset class and revenue
Diversification by location, asset class and revenue By Property By Sector Japan Nursing Homes 15% Portfolio 19% Pharmaceutical MEH 4% Hospitals ESH 56% 62% 3% Asset Size Medical Centres 19% GEH 22% Japan Portfolio Nursing Homes 20% MEH 17% 50% Pharmaceutical ESH 4% Gross Revenue 3% Hospitals GEH 80
Slide 18: Acquisitions Update
Acquisitions Update • On 16 May 2008, Parkway Life REIT completed its first investment of a pharmaceutical products distributing and manufacturing facility in Chiba prefecture Japan, for a total purchase price of S$35 million. • On 30 May 2008, Parkway Life REIT completed its investment of two high
Slide 19: Key Benefits of Recent Acquisitions
Key Benefits of Recent Acquisitions 9 Yield accretive, attractive total returns 9 Taps key market in Japan, where the demand for good quality healthcare real estate assets is expected to grow, driven by the fact that by the year 2050, it is predicted that one in three Japanese will be over 65 years
Slide 20: Portfolio Highlights
Portfolio Highlights ~-“@ Se” | ParkwayLife REIT 20 |
Slide 21: ParkwayLife REIT – Portfolio
Largest Healthcare REIT in Asian ParkwayLife REIT – Portfolio Region with an enlarged portfolio of S$1.01 billion 1 Bon Sejour P-Life Matsudo Shin-Yamashita Bon Sejour Palmary Inn Ibaraki Akashi Bon Sejour P-Life Matsudo Ibaraki Palmary Inn Senior Chonaikai Suma Makuhari Kan Himawari Home Smiling Ho
Slide 22: Our Initial Portfolio - Singapore
Our Initial Portfolio - Singapore Property Mount Elizabeth Hospital Gleneagles Hospital East Shore Hospital Total (Singapore) Type Hospital and Medical Centre Land Tenure 67 years 75 years 75 years Average 72 years Gross Floor Area (sq m) 1 58,139 49,003 10,993 118,135 Licensed Beds 2 505 380 154 1,
Slide 23: Q2 Acquisitions in Japan
Q2 Acquisitions in Japan Property P-Life Matsudo Bon Sejour Shin-Yamashita Bon Sejour Ibaraki Pharmaceutical product Type distributing & 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
Slide 24: Q3 Acquisitions in Japan
Q3 Acquisitions in 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 1,68
Slide 25: Q3 Acquisitions in Japan (cont’d)
Q3 Acquisitions in Japan (cont’d) Smiling Home Medis Fureai no sono Smiling Home Medis Property Total (Japan) Musashi Urawa Nerima Takanodai Koshigaya Gamo 1 distribution facility & Type Paid nursing home with care service 9 nursing homes Land Tenure Freehold - Land Area (sq m) 802 2,282 1,993 30,95
Slide 26: Portfolio Key Statistics
Portfolio Key Statistics (As at 30 September 2008) Properties Singapore Mount Elizabeth Hospital, Gleneagles Hospital East Shore Hospital Japan P-Life Matsudo, Bon Sejour Shin-Yamashita, Bon Sejour Ibaraki, Palmary Inn Akashi, Palmary Inn Suma. Senior Chonaikai Makuhari Kan, Himawari Home Kamakura,
Slide 27: Competitive Strengths of the Properties
Competitive Strengths of the Properties 100 % committed Diversified occupancy Portfolio Locked-in Value (Geography & given long-term Asset Type) leases + (weighted average lease Quality Assets Stability and term to expiry of 14.12 yrs1) Sustainability of Returns to Good Organic Growing Demand Unitho
Slide 28: Capital and Financial Management
Capital and Financial Management 28
Slide 29: Effective Capital Management
Effective Capital Management - Outstanding debt as at 30 September 2008 comprises: S$203 million 1 year facilities to be replaced by long term debt facilities secured after quarter end, on [date]. Parkway Life REIT’s Refinancing Initiatives Committed S$100.6 million 3-year term loan & • No refinan
Slide 30: Proactive Risk Management Initiatives
Proactive Risk Management Initiatives The Management has undertaken the following initiatives to manage exposure from interest rate and foreign exchange volatilities … Currency Risk – Net Income Currency Risk – Underlying Interest Rate Risk from Foreign Investments Asset Value Enter into long term
Slide 31: Gearing and Debt Funding Profile
Debt Funding Profile Debt headroom Gearing: Post Acquisition (S$m) 20% Up to 45% # 470 0 0 Up to 60% # 1,030 560 0 60% Optimal debt level of 40% to 45% 1,800 560 60% 45% 1,600 Assets (S$m) Gearing (%) 1,400 40% 20% 471 471 1,200 4% 1,000 20% 169 169 169 800 855 855 855 855 600 0% Mar-08 Post Japan a
Slide 32: Our Strategy
Our Strategy ~-“6 so” ParkwayLife REIT 32 |
Slide 33: Current Acquisition Growth Strategy
Current Acquisition Growth Strategy The manager plans to undertake the following straegies… Acquire third party Work with Sponsor Development Opportunities assets • Target strong Work with Sponsor to • Work with strong operators who require • Securitise existing real operators to identify capital or
Slide 34: Market Conditions: Global Financial Crisis
Market Conditions: Global Financial Crisis Adapting strategy to market conditions Economic Challenges ¾ Credit crisis in the US causing recession in Take advantage of market the US and the rest of the world condition to scoop up good ¾ Falling real estate and equity prices curtail yielding assets at
Slide 35: PLife REIT’s Core Markets
PLife REIT’s Core Markets Japan High Taiwan US$79.6bn US$21.8bn Sophistication of private healthcare sector2 S. Korea Singapore US$22.4bn Australia US$3.3bn US$25.2bn Hong Kong US$5.1bn Malaysia Philippines US$3.0bn US$2.3bn India Thailand US$47.8bn US$8.5bn China US$104.5bn Legend Vietnam US$2.9bn
Slide 36: Acquisition Goals
Acquisition Goals Portfolio Weighting Portfolio Size Portfolio Mix Geographical Mix • Current portfolio mix is : • Current geographic mix is : • 62% hospitals • 81% Singapore • Current asset size is • 19% medical offices • 19% Japan S$1bil by valuation • 15% nursing homes • Previous target was to •
Slide 37: Pro-Active Asset Management Initiatives
Pro-Active Asset Management Initiatives Continuous effort to explore asset enhancement initiatives - Convert non/ lower revenue yielding space to higher revenue yielding space Embark on Revenue Intensifying Initiatives - Eg. Improving service levels at our Hospitals through upgrading of wards & visi
Slide 38: Unit Price Performance Since Listing
Unit Price Performance Since Listing 38
Slide 39: Unit price relative performance
Unit price relative performance S-REIT -40.22% STI -42.12% PLife REIT -24.79% 120 110 100 90 80 70 60 50 23- 12- 02- 22- 11- 01- 21- 10- 30- 19- 10- 30- 19- 09- 29- 18- 08- 28- 17- 06- 26- 16- Aug- Sep- Oct- Oct- Nov- Dec- Dec- Jan- Jan- Feb- Mar- Mar- Apr- May- May- Jun- Jul- Jul- Aug- Sep- Sep- Oc
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Parkway Life Real Estate Investment Trust — 3QFY2008 Earnings Presentation on 6ix