Parkway Life Real Estate Investment Trust (SGX: C2PU), or PLife, has announced a distribution per unit (DPU) of S$0.1492 for FY 2024, marking an impressive seventeenth consecutive year of growth.
This 1.0% year-on-year (YOY) increase is particularly noteworthy given the headwinds from a weaker Japanese Yen and the dilution effect of an enlarged unit base following equity fundraising (EFR) for the acquisition of French nursing homes.
While some investors might find PLife’s growth pace modest, its consistent performance has been invaluable to my portfolio over the past decade.
Just as a successful soccer team needs a strong defence, PLife acts as a reliable center back in my portfolio. Its primary role isn’t to deliver spectacular capital gains, but rather to generate stable and predictable cash flow.
This resilience stems from PLife’s disciplined capital management and prudent growth strategy. Their JPY net income hedges, currently in place until Q1 2029, have effectively mitigated the impact of the Yen’s recent weakness.
Furthermore, their strategic expansion into a third key market, via the aforementioned French nursing home acquisition, was carefully considered and executed only after more than three-year period of planning and preparation.
Looking ahead, I anticipate further DPU growth. This fiscal year will see the full-year contribution from the French nursing homes, coupled with the favourable lease structures in place for PLife’s Singapore hospitals.
Moreover, with Project Renaissance, the significant renovation and refurbishment of Mount Elizabeth Hospital, nearing completion, there should be a substantial DPU jump to over S$0.18 for FY 2026 and beyond.
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