Parkway Life REIT - Maybank Research 2025-01-08: Asia's Largest Healthcare REIT, Expensive But Defensive

• 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

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Krishna Guha Maybank Research | https://www.maybanktrade.com.sg/ 2025-01-08 SGinvestors.io

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