Parkway Life REIT - CGS-CIMB Research 2022-09-13: Expanding Japan Footprint

Parkway Life REIT - Expanding Japan Footprint

  • Parkway Life REIT announced the acquisition of 3 nursing homes – Blue Terrace Kagura, Blue Rise Nopporo and Blue Terrace Taisetsu – in the Hokkaido region in Japan for a total purchase price of ¥2,558m (S$26.1m), or 12.2% below independent valuation. See Parkway Life REIT's announcement dated 2022-09-13 for details of the properties.
  • Post purchase, Parkway Life REIT’s Japan portfolio will expand to S$725.3m, making up ~32% of its total AUM.
  • Under the terms of the agreement, Parkway Life REIT will take over the properties’ existing lease agreements which have a balance lease term of 19 years. This will likely extend its portfolio weighted average lease expiry (WALE) from 17.01 years to 17.05 years.
  • Parkway Life REIT expects to fund the acquisition with ¥ debt, to provide a natural hedge for foreign exchange risks arising from ¥ denominated assets. That said, at distribution income level, Parkway Life REIT income remains well hedged, with its ¥ net income hedged till 1Q27 (as at end 2Q22), providing income stability to unitholders.
  • We raise our FY22-24F DPU estimates for Parkway Life REIT by 0.27-0.48% to factor in the new income streams. Accordingly, our DDM-based target price for Parkway Life REIT rises slightly to S$5.06.
  • We like Parkway Life REIT for its stability, backed by its defensive income structure with in-built escalation features. However, with an estimated total return of less than 10% in the near term, we retain our HOLD rating on Parkway Life REIT.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

LOCK Mun Yee CGS-CIMB Research | 2022-09-13
SGX Stock Analyst Report HOLD MAINTAIN HOLD 5.06 UP 5.050

Read also CGS-CIMB's most recent report:
2022-09-20 Parkway Life REIT - More Japan Acquisitions

Relevant links:
Parkway Life REIT Analyst Report,
Parkway Life REIT Target Price,

Parkway Life REIT Share Price History,
Parkway Life REIT Announcements,
Parkway Life REIT Dividends/ Corp Actions,
Parkway Life REIT News Articles


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