- We initiate coverage of Parkway Life REIT with a BUY and DDM-based target price of S$4.10.
- Parkway Life REIT has a strong record of uninterrupted recurring dividend growth, a well-articulated growth strategy and a visible and growing distribution profile from lease renewals. Sponsor IHH Healthcare has one of the world’s largest healthcare networks and provides an acquisition pipeline and deal network.
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Strong track record & earnings visibility
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- With renewed master lease for Singapore hospitals in place, it has a visible revenue and distribution growth for the forecast years (2024e- 26e) and stable inflation-adjusted revenue subsequently.
- Maiden accretive acquisition of 11 nursing homes in France establishes a footprint in a third market after SG and Japan. Parkway Life REIT has partnered with a dominant operator (France’s second largest/Europe’s third largest), which should help to scale its presence.
- All in, we forecast DPU CAGR of 7.2% for Parkway Life REIT in the forecast years driven by in-built rent escalation in SG and acquisition in France.
Strategic growth plan, favourable cost of capital
- Read more at SGinvestors.io.
