On 5 November 2025, Parkway Life REIT (“PLife”) released their third quarter business update for FY2025. PLife’s financial position remained relatively stable during the quarter, with no material changes across key metrics.
However, it is worth noting that macroeconomic uncertainties emerged in Japan after the quarter ended, including a sharp depreciation of the Japanese yen against the Singapore dollar. Such developments may prompt policy adjustments, which could in turn affect PLife’s capital management, given that its borrowings are largely denominated in Japanese yen.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only. It does not take into account your individual needs, investment objectives and specific financial circumstances.
Website: General Announcement::Business Update For 3Q 2025
Photo source: https://fifthperson.com/2021-parkway-life-reit-agm/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | +2.6% | -0.8% |
| Rating | Favorable | Neutral |
For PLife, DPU disclosed are as follows:
- Third Quarter of FY2025: SGD0.0391 per unit
- Second Quarter of FY2025: SGD0.0381 per unit
- First Quarter of FY2025: SGD0.0384 per unit
- Fourth Quarter of FY2024: SGD0.0362 per unit
DPU for the third quarter of FY2025 has increased by 2.6% to SGD0.0391 per unit from SGD0.0381 per unit in the previous quarter. The increase in DPU was supported by a lower loss from financial derivatives during the quarter, as noted that net property income and finance costs remain relatively unchanged. This metric has shifted towards Favorable.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 99.4% | 100.0%% |
| Rating | Favorable | Favorable |
Based on the announcement on 5 November 2025, overall occupancy was not included in the business update for the third quarter of FY2025.
For PLife, occupancy and appraised value by portfolio is provided as below:
- Singapore: Committed Occupancy 100.0%, Appraised Value SGD1,603 million
- Japan: Committed Occupancy 97.7%, Appraised Value SGD691 million
- France: Committed Occupancy 100.0%, Appraised Value SGD163 million
Using the above information, the overall occupancy is estimated by allocating the respective portfolio committed occupancy based on their proportionate appraised values. Do note that this is an estimation that may defer from management’s calculations.
Occupancy rate as of 30 September 2025 has decreased to 99.4%. The significant decrease arose from the Japan portfolio, which saw a decrease by 2.3% quarter-on-quarter. This metric remains Favorable as it is significantly above my expected healthy occupancy rate of 95%.
Gearing Ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 35.8% | 35.4% |
| Rating | Favorable | Favorable |
Gearing ratio as of 30 September 2025 has remain relatively unchanged at 35.8%. This metric remains Favorable.
Interest Coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 8.9x | 9.1x |
| Rating | Favorable | Favorable |
The interest coverage as of 30 September 2025 has decreased to 8.9 times. This metric remains Favorable as it is significantly higher than my preference of 3.0 times. This is attributable to their reported low cost of debt of 1.57% as their loans and borrowings are mainly Japanese Yen denominated.
The Bank of Japan have kept interest rates steady at 0.50% since the increase on 24 January 2025, the highest in 17 years. However, according to a slim majority of economists in a Reuters poll, the Bank of Japan will raise interest rates at its upcoming December meeting, pushing through with its aim of normalizing monetary policy, backed by the yen’s recent decline.
Website: Bank of Japan holds rates in first meeting after Takaichi’s ascent to prime minister
Website: BOJ set to hike interest rates in December, but decision on knife-edge: Reuters poll
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.3 years | 3.0 years |
| Rating | Favorable | Favorable |
Based on the announcement on 5 November 2025, the overall debt maturity profile was not included in the business update for the third quarter of FY2025.
An estimate of the overall debt maturity profile can be made using the yearly maturity breakdown provided by management. Management have disclosed the impact of post refinancing in their business update. Do note that this is an estimation that may defer from management’s calculations.
The weighted average term to maturity of their debt as of 30 September 2025 has lengthened to 3.3 years. This metric remains Favorable as there is sufficient time for the REIT to refinance their debts as they fall due. Do note that 20% of their debt due to mature by the end of FY2026.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.68 | 1.73 |
| Rating | Unfavorable | Unfavorable |
The Price to Book (“P/B”) ratio has become slightly cheaper at 1.68. This is computed using the closing share price of SGD4.05 per unit on 28 November 2025 and the net asset value of SGD2.41 per unit as of 30 September 2025. The P/B ratio is Unfavorable.
It was worth noting however that the share price continued to rise despite being grossly overvalued. We will cover more in the “Key Things to Note” section.
As of 28 November 2025, the Market Capitalization is approximately SGD2,643 million.
Website: Yahoo Finance: Parkway Life Real Estate Investment Trust (C2PU.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 2.48% | SGD 0.100 |
| 2024 | 4.94% | SGD 0.200 |
| 2023 | 3.61% | SGD 0.146 |
| 2022 | 2.62% | SGD 0.106 |
| 2021 | 3.48% | SGD 0.141 |
| 2020 | 3.35% | SGD 0.136 |
There is no additional dividend to be paid out in the calendar year 2025. Do note that the dividend paid out in the calendar year 2024 was higher due to an advance distribution of SGD0.050 per unit provided with the equity fund raising in 2024. If the advance distribution was excluded from the calendar year 2024 and included in the calendar year 2025, both years will see a dividend paid out of approximately SGD0.150 per unit. This is aligned to the previous article as a stable and conservative estimate.
With the closing share price of SGD4.05 per unit on 28 November 2025, this translates to a dividend yield of 3.70%. For my benchmark, a reasonable yield would be around 4.25%. PLife yield sounds similar to growth equity stocks from other industries. The dividend yield is Unfavorable.
Website: Reasonable Dividend Yield 2025Q4 – 4.25%
Nonetheless, there is an interesting rationale for the dividend yield to be compressed and will be covered more in the “Key Things to Note” section.
Key Things to Note
Expensive getting more expensive
PLife is a relatively more expensive REIT compared to others that are available in the market. A dividend yield of 3.70% and P/B ratio of 1.68 exposes investors to higher risks. Given the straightforward business of REITs, their fair value usually should trade around their net asset value.
The key thing to note however, unlike most other REITs, PLife have income visibility. With their 20 years lease, this contributes a substantial portion of their income and serves as a bulwark for PLife as they explore new initiatives. Not to mention that this lease agreement also takes into consideration the Consumer Price Index (“CPI”) and is designed to increase overall rent payable based on the CPI. This is an effective hedge against inflation, which has been breaking historic highs recently.
Based on its dividend records, we can also see that they have steadily increase dividend payout over the years. Its stability and transparency are the reason for its high premium.
Nonetheless, it is still expensive, and something that investors should take note off and decide if they are comfortable with it before investing. If the market decides to crash, PLife’s can easily lose a significant portion of its market value.
Tenant concentration
Parkway Hospitals Singapore Pte. Ltd. is their top tenant contributing 60.0% of gross revenue. This indicates a heavy concentration of revenue and puts the REIT at the mercy of their customer.
While they have renewed the lease for 20 years, they are still dependent on the financial position of their customers. Cashflows have been tightening for all businesses and rental expense is one of the significant overheads that tenants will wish to cut down on. This might adversely affect the DPU of the REIT moving forward.
It is worth nothing however that the top tenant is a wholly owned subsidiary of Parkway Pantai Limited, who is a wholly owned subsidiary of Kuala Lumpur-based IHH Healthcare, Asia’s largest private healthcare group. IHH Healthcare is also in a good financial position, based on their latest financial highlights.
Website: IHH Healthcare Financial Highlights
The largest shareholders of IHH Healthcare are Mitsui of Japan (one of the largest sogo shosha in Japan) and then followed by the Malaysian government’s sovereign wealth fund Khazanah Nasional. This leads me to not expect the tenants to run into cash flow problems in the short term.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | +2.6% | Favorable |
| Occupancy | 99.4% | Favorable |
| Gearing Ratio | 35.8% | Favorable |
| Interest Coverage | 8.9x | Favorable |
| Debt Maturity Profile | 3.3 years | Favorable |
| Price to Book Ratio | 1.68 | Unfavorable |
| Overall | Favorable |
The overall metric remains Favorable. There were no significant changes, and management seems to be proactive with managing their risks.
Background
PLife is one of Asia’s largest listed healthcare Real Estate Investment Trusts (“REIT”). It invests in income-producing real estate and real estate related assets that are used primarily for healthcare and healthcare-related purposes (including, but not limited to, hospitals, nursing homes, healthcare facilities and real estate and/or real estate assets used in connection with healthcare research, education, and the manufacture or storage of drugs, medicine and other healthcare goods and devices).
It owns the largest portfolio of strategically located private hospitals in Singapore comprising Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital. In addition, it has high-quality nursing home and care facility properties across various prefectures in Japan, as well as strategically located nursing homes in France. Managed by Parkway Trust Management Limited, PLife REIT has been listed on the Mainboard of the Singapore Stock Exchange since August 2007.
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