31 December 2015, PLife REIT’s weighted average debt
term to maturity stands at 3.5 years, with no significant
amount of loan due in a single year.
PLife REIT has been conservative and proactive in
managing its interest rate and foreign exchange risks. In
view of an expected interest rate hike by the US Federal
Reserve and changes in monetary policy across markets,
the REIT had put in place interest rate hedges for its
SGD long-term borrowings. With that, we have increased
interest rate hedge ratio from 78% to approximately 95%.
Cognisant of its expanded Japan exposure, the REIT
has been conscientiously monitoring and extending the
net income hedges for its Japan portfolio which well-
served as an effective shield against the JPY currency
fluctuations. As at 31 December 2015, PLife REIT has in
place Japan net income hedge till 1Q 2020.
These proactive initiatives allow the REIT to lengthen
its weighted average debt maturity, stagger its debt
repayment schedule and mitigate exposure to market
fluctuations and risks. As evidence of its robust balance
sheet and flexibility, the REIT has been rated with a Baa2
issuer rating by Moody’s.
Being in an enviable financial position, with a healthy
gearing of 35.3% as at 31 December 2015, PLife REIT is
poised to capture near-term opportunities as it continues
to grow its portfolio.
Capitalising on its first mover advantage and robust
partnerships with leading operators, PLife REIT is able
to seize incremental new acquisitions despite growing
competition.
Its approach of acting decisively and taking advantage of
opportunities, building strong relationships with leading
nursing home operators and enhancing value through
asset enhancement initiatives, signifies the REIT’s
commitment to create greater synergies and value in the
market as it strengthens its foothold in Japan.
Effective and Prudent Financial and Risk
Management
PLife REIT’s proven capital and financial management
strategy has allowed the REIT to generate sustainable
returns for Unitholders over the years. As well as having the
flexibility to be opportunistic in the event of a compelling
acquisition, its risk management strategy provides a
cushion for capital preservation and minimises exposure
to interest rate and foreign exchange risks.
As part of the continuous effort to enhance PLife REIT’s
balance sheet, we have pre-emptively termed out
existing maturing loans, ensuring no immediate long-
term loan refinancing needs until 2017. In addition, the
expiring loans have been refinanced via a mix of four to
six years loan tenor, so as to achieve an optimal pricing
and a more spread out debt maturity profile. As at
ParkwayLife REIT
Annual Report 2015
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