Page 13 - ar2012

Annual Report FY2012 ParkwayLife REIT
(“AEI”) scheme to buttress PLife REIT’s organic
growth in 2012. The year sees us completing the
5th and 6th AEIs for our Japan portfolio and the roll
out of a new “Refurbishment AEI” concept, whereby
property refurbishment costs are being borne by
PLife REIT in exchange for incremental rent from
its Lessee. The Refurbishment AEI which serves to
preserve the competitiveness of our property and
revenue sustainability of our nursing home operator
is one of our innovative asset management strategies
to generate attractive organic returns for PLife REIT.
Strengthened Foundation with Dynamic
Financial and Capital Management
During the year, PLife REIT continues to strengthen
our foundation through dynamic fnancial and capital
management to generate greater value for our
Unitholders. Following the pre-emptive refnancing of
our short-term loan facilities and Floating Rate Notes
in June 2012, PLife REIT has no refnancing needs
for our existing total debt portfolio until FY2014.
We believe that the long-term
prospects of the regional healthcare
industry will continue to be robust
due to the rising demand for better
quality private healthcare services
driven by the fast-ageing population.
1 Based on share price of S$2.15 as at 31 December 2012.
11
The natural hedge strategy we have adopted since
our frst acquisition in Japan in 2008 to match
our assets and liabilities that are denominated in
Japanese Yen has shielded us from the Japanese
Yen foreign currency volatility, providing stable net
asset value. The year sees us further extending our
Japanese Yen-denominated net income hedge for
fve years till 1Q2017, cushioning PLife REIT from the
volatility in Japanese Yen.
As at 31 December 2012, our gearing remains
healthy at 32.9% with a low weighted average all-in
cost of debt. The robust balance sheet with ample
debt headroom, no near-term refnancing risks and
a positive “BBB” investment grade credit rating has
attested to PLife REIT’s stable fundamentals, enabling
sustainability of distributions to its Unitholders.
Our Appreciation
We wish to extend our appreciation to our Board
Members, management and staff for your hard work
and dedication and to our Unitholders, business
partners and lessees for your continual support.
While outlook of the global economy remains
uncertain, we believe that the long-term prospects
of the regional healthcare industry will continue to
be robust due to the rising demand for better quality
private healthcare services driven by the fast-ageing
population.
Backed by solid fundamentals and sound strategies,
favorable portfolio attributes and resilient growth of
the healthcare industry in Asia Pacifc region, we are
confdent that PLife REIT is well positioned for future
growth.
Lim Kok Hoong
Chairman
Yong Yean Chau
Chief Executive Offcer and Executive Director