Parkway Life Real Estate Investment Trust · SGX:C2PU
Parkway Life Real Estate Investment Trust — FY2014 Earnings Presentation
53 slides from Parkway Life Real Estate Investment Trust's earnings presentation, January 2015
Slide 1: Investor Relations Presentation Full Year 2014 Results
(“PLife REIT”) INVESTOR RELATIONS PRESENTATION Full Year 2014 RESULTS
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. 4Q 2014 Key Highlights 3. Our Properties 4. Growth Strategy & Core Markets 5. Capital & Financial Management 6. Appendix 3
Slide 4: 1. Overview of PLife REIT
(“PLife REIT”) 1. Overview of PLife REIT 4
Slide 5: PLife REIT Portfolio
PLife REIT Portfolio Largest listed healthcare REIT in Asian region with an enlarged portfolio of S$1.5 billion2 Core Strengths: Defensive long term lease structure with downside protection Stable income stream supported by regular rental revision Diversified portfolio of high quality and yiel
Slide 6: 2. 4Q 2014 Key Highlights
(“PLife REIT”) 2. 4Q 2014 Key Highlights 6
Slide 7: 4Q and Full Year 2014 Key Highlights
4Q and Full Year 2014 Key Highlights Steady DPU Growth Since IPO ― DPU for 4Q 2014 up 2.9% (4Q Y-O-Y) to 2.90 cents; ― Full year DPU growth of 7.1% y-o-y to 11.52 cents ― Strong growth of 82.3% since IPO Strengthening of Our Age Care Portfolio in Japan ― Acquisition of 2 Japan nursing home prop
Slide 8: 4Q and Full Year 2014 Key Highlights [cont'd]
4Q and Full Year 2014 Key Highlights [cont’d] Valuation Gain In Properties ― Valuation gain of S$45 million (3.1%) of the total portfolio as at 31 December 2014 Healthy Balance Sheet ― Healthy gearing of 35.2% as at 31 December 2014 ― The all-in cost of debt is 1.4% as at 31 December 2014 ― No
Slide 9: Revenue Growth
Revenue Growth 4Q 2014 revenue grew by 1.5% to S$25.1 million FY 2014 revenue grew by 7.1% to S$100.4 million 4Q Revenue (S$’000) Full Year Revenue (S$’000) +1.5% +1.5% +7.1% +7.1% 24,736 25,107 26,000 100,382 105,000 24,000 100,000 93,693 22,000 95,000 20,000 90,000 4Q 2013 4Q 2014 2013 2014 No
Slide 10: Net Property Income Growth
Net Property Income Growth 4Q 2014 NPI increased by 1.3% to S$23.5 million, contributed by: Rent contributions from properties acquired in 2H 2013 and 1Q 2014; and Upward minimum guarantee rent revision of Spore hospitals by 2.81%1 FY 2014 NPI increased by 7.1% to S$93.8 million 4Q NPI Full
Slide 11: Steady Distributable Income Growth
Steady Distributable Income Growth 4Q 2014 DI grew by 2.9% to S$17.5 million FY 2014 DI grew by 7.1% to S$69.7 million 4Q DI (S$’000) Full Year DI (S$’000) +2.9% +2.9% +7.1% +7.1% 69,698 17,530 18,000 17,044 70,000 65,054 17,000 65,000 16,000 60,000 15,000 55,000 4Q 2013 4Q 2014 2013 2014 11
Slide 12: Strong DPU Growth Since IPO
Strong DPU Growth Since IPO DPU has grown steadily at a rate of 82.3% since IPO1 DPU (cents) 11.52 12.0 2 10.75 10.31 +82.3% 9.60 10.0 8.79 7.74 8.0 6.83 6.32 6.0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 (annualised) Note: 1. YTD 4Q 2014 accumulated DPU payout since IPO is 6
Slide 13: Recent Developments
Recent Developments • Announced 4Q 2014 results: Gross revenue increased 1.5% year-on-year to S$25.1 million. 27 Jan 2015 Distributable income increased 2.9% year-on-year to S$17.5 million. DPU of 2.90 cents for the period declared. • Acquired a nursing home and care facility property, Ocean View Sh
Slide 14: 3. Our Properties
(“PLife REIT”) 3. Our Properties 14
Slide 15: Our Properties - Singapore
Our Properties - Singapore 1 A portfolio of 3 strategically-located world-class local private hospitals worth S$1.05 billion Master Lease with Parkway Hospitals Singapore Pte. Ltd, a wholly owned subsidiary of Parkway Pantai Limited (“Parkway”), the largest private healthcare operator in Singapo
Slide 16: Master Lessee – IHH Group
Master Lessee – IHH Group Khazanah1 Approx. 44%6 Management & Other Approx. 35.8%7 Services IHH2 Parkway Life REIT3 100% Net Property Income Ownership of Assets Master Lessee Master Lease The Manager (PTML)4 Singapore Hospitals PHSPL5 Wholly owned subsidiary of IHH Rental Payments Footnote: 1 Khazan
Slide 17: Master Lessee – IHH Group (Continued)
Master Lessee – IHH Group1 (Continued from previous slide) IHH Majority owned by Khazanah, the investment holding arm of the Government of Malaysia Dual listing in Malaysia and Singapore on 25 Jul 2012 with a market capitalization of approximately S$12.20 billion as at 31 December 2013 In Sing
Slide 18: Our Properties – Singapore
Our Properties – Singapore 3 Distinct features of our Singapore Hospital Properties: Long-term Master 15 + 15 years with effect from 23 August 2007 Leases with c.f. average industry lease period of 3-5 years Parkway Hospitals 100% committed occupancy Singapore PLife REIT does not bear these
Slide 19: 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 20: Singapore Hospital Properties – Rent Review Mechanism
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 21: Our Properties – Japan
Our Properties – Japan A portfolio of 37 high quality healthcare properties worth 1 S$439 million , comprising: 1 pharmaceutical product distributing and manufacturing facility P-Life Matsudo (P-Life Matsudo) 36 private nursing homes Master tenancy with 18 lessees Nursing Home Properties B
Slide 22: Introduction to Japan Properties – Cont'd
Introduction to Japan Properties – Cont’d Why Japan nursing homes? Acute aging population in Japan 1 in 3 Japanese to be over 65 years old by 2050 Well established laws and regulations Diversified rental sources complement Singapore hospital revenues to enhance revenue stability of overall p
Slide 23: Our Properties - Japan
Our Properties - Japan 2 Unique features of our Japan assets: Favorable Lease Structure Long term lease structure with weighted average lease term to expiry of 1 13.24 years “Up only” Rental Review Provision for most of our nursing homes Master Tenanted Signifies 100% committed occupancy N
Slide 24: Our Properties – Japan
Our Properties – Japan Approximately 77.5% of revenue from Japan portfolio is downside- protected Revenue from Japan portfolio (as at 31 December 2014) 77.5%1 Downside- protected Subject to market 22.5%2 revision Notes: 1. Based on Gross Revenue (as at 31 Dec 2014) of 27properties 2. Based on Gros
Slide 25: Diversified Nursing Home Operators
Diversified Nursing Home Operators ¥70,000 Thousands K.K Sawayaka Club 17 high quality nursing K.K. Asset home operators ¥60,000 K.K Habitation Diversifies tenant risk Miyako Enterprise Co., Ltd. K.K. Riei Back-up operator M o n th ly R e n ta l C o n tr ib u tio n ¥50,000 Benesse Style Care C
Slide 26: Key Nursing Home Operators
Key Nursing Home Operators Key nursing home operators contributed 65% of total Japan revenue, namely Benesse Style Care Co., Ltd Part of the listed company Benesse Holdings Inc (the “Group”) Market capitalisation is about JPY403,667 million (S$5,001 million) The largest private nursing home
Slide 27: Our Properties – Malaysia, Kuala Lumpur
Our Properties – Malaysia, Kuala Lumpur 1 A portfolio of high quality healthcare assets worth S$8.3 million within Gleneagles Intan Medical Centre Kuala Lumpur, next to the 330-bed Gleneagles Hospital Kuala Lumpur Multi tenancies with lessees Gleneagles Hospital (Kuala Lumpur) Sdn. Bhd. and CIMB
Slide 28: 4. Growth Strategy & Core Markets
(“PLife REIT”) 4. Growth Strategy & Core Markets 28
Slide 29: PLife REIT's Next Phase of Growth
PLife REIT’s Next Phase of Growth 29
Slide 30: 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 31: 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 within the i
Slide 32: 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 33: 5. Capital and Financial Management
(“PLife REIT”) 5. Capital and Financial Management 33
Slide 34: 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: To mitigate immediate refinancing risks post-acquisition 2. PLife REIT’s S$1.5billion1 portfolio is unencumbered Minimise short or Ensures financing flex
Slide 35: Debt Maturity Profile
Debt Maturity Profile1 As at 31 December 2014 1. As at 31 December 2014, there were some outstanding short term loans drawdown of JPY5,585.5 million (S$61.7 million) maturing in March 2015 (”JPY STL Drawdown”), for the purpose of partial funding of new acquisitions in Japan as announced in December
Slide 36: Additional Debt Capacity
Ample Debt Headroom Debt headroom of S$134.8 million, S$298.8 million and S$1,036.7 million before reaching 40%, 45% and 60% gearing respectively PLife REIT has ample funding to support future acquisitions and growth opportunities Additional Debt Capacity Asset 1,036.7 (S$ ’M) (S$’M) 298.8 134.8
Slide 37: 6. Appendix
(“PLife REIT”) 6. Appendix 37
Slide 38: Our Portfolio - Summary
Our Portfolio - Summary Portfolio Singapore Japan Malaysia Total 36 nursing homes; 4 Hospitals & medical centre; 1 pharmaceutical product 36 nursing homes; Hospital & Medical Type distribution & manufacturing Medical Centre 1 pharmaceutical product Centre facility distributing & manufacturing facili
Slide 39: 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 Floor Area (sq m) 1 58,139 49,003 10,994 Beds 2 345 270 106 Operating theatres 2 13 12 4 Strata Units / Car Park Lots 30 strat
Slide 40: 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) 8,450 1,653 3,051 Floor Area (sq m) 3,240 3,273 3,6
Slide 41: Our Portfolio - Japan
Our Portfolio - Japan Property Palmary Inn Akashi Palmary Inn Suma Senior Chonaikai Makuhari Kan Type Paid nursing home with care service Land Tenure Freehold Freehold Freehold Land Area (sq m) 5,891 2,676 2,853 Floor Area (sq m) 6,562 4,539 4,361 Number of Units (Rooms) 96 59 1082 1987; 1992; Year
Slide 42: Our Portfolio - Japan
Our Portfolio - Japan Smiling Home Medis Smiling Home Medis Amille Nakasyo Maison de Centenaire Property Musashi Urawa Koshigaya Gamo Ishizugawa Type Paid nursing home with care service Land Tenure Freehold Land Area (sq m) 802 1,993 2,901 1,111 Floor Area (sq m) 1,603 3,824 3,259 2,129 Number of Un
Slide 43: 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) 801 1,396 727 2,023 Floor Area (sq m) 1,263 2,912 1,155 3,9
Slide 44: 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 1,042 2,813 Floor Area (
Slide 45: Our Portfolio - Japan
Our Portfolio - Japan Sawayaka Property Sawayaka Nogatakan Sawayaka Sakurakan Sawayaka Fukufukukan Higashikagurakan Type Paid nursing home with care service Land Tenure Freehold Freehold Freehold Freehold Land Area (sq m) 2,707 6,276 1,842 4,813 Floor Area (sq m) 3,147 5,044 3,074 5,335 Number of Un
Slide 46: 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) 1,762 935 951 Floor Area (sq m) 2,692 1,847 2,828 Number of Units (Rooms) 64 47 71 Year of Completion 2006 2006 200
Slide 47: 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) 794 1,139 Floor Area (sq m) 1,560 1,688 Number of Units (Rooms) 44 49 Year of Completion 2006 2004 Committed Occupancy 100% Name of Lessee (s
Slide 48: Our Portfolio - Japan
Our Portfolio - Japan Property Happy Life Toyonaka 1 Palmary Inn Shin-Kobe Type Paid nursing home with care service Land Tenure Freehold Freehold Land Area (sq m) 628 1,034 Floor Area (sq m) 1,254 3,964 Number of Units (Rooms) 42 71 1992 Year of Completion 2007 Conversion works were completed in 200
Slide 49: Our Portfolio - Japan
Our Portfolio - Japan Property Sawayaka Seaside Toba Sawayaka Niihamakan Sawayaka Minatokan Type Paid nursing home with care service Land Tenure Freehold Freehold Freehold Land Area (sq m) 2,803 4,197 3,551 Floor Area (sq m) 7,360 7,382 2,246 Number of Units (Rooms) 129 135 50 Year of Completion 201
Slide 50: Our Portfolio - Japan
Our Portfolio - Japan Property Sawayaka Mekari Nibankan Sawayaka Kiyotakan Type Paid nursing home with care service Land Tenure Freehold Freehold Land Area (sq m) 1,354 2,597 Floor Area (sq m) 2,133 5,661 Number of Units (Rooms) 61 108 Year of Completion 2012 2013 Committed Occupancy 100% Name of Le
Slide 51: Our Portfolio - Japan
Our Portfolio - Japan Maison des Centenaire Property Maison des Centenaire Hannan Sunhill Miyako Ohhama Paid nursing home with care Paid nursing home with care Type Extended-stay lodging facility service service Land Tenure Freehold Freehold Freehold Land Area (sq m) 7,827 10,867 1,281 Floor Area (s
Slide 52: Our Portfolio - Japan
Our Portfolio - Japan Property Habitation Jyosui Type Paid nursing home with care services Land Tenure Freehold Land Area (sq m) 1 3,259 Floor Area (sq m) 2 6,076 Number of units 76 Year of Completion 2005 Committed Occupancy 100% Name of Lessee (s) K.K. Habitation Date of Acquisition 12 December 20
Slide 53: Our Portfolio - Malaysia
Our Portfolio - Malaysia Property Gleneagles Intan Medical Centre, Kuala Lumpur Type Medical Centre Land Tenure Freehold Land Area (sq m) 3,450 Floor Area (sq m)1 2,444 Number of Car Park Lots 69, all of which owned by Parkway Life REIT Year of Completion 1999 Committed Occupancy 100% (excluding car
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