The new master lease agreements will lift rents by 39.6% at the end of Year 4 of the renewal term versus the estimated rent for Year 15 of the IPO master lease agreement. The new portfolio weighted average lease to expiry (WALE) is raised to 16.6 years compared to just 5.7 years, providing stability of income for the long term, with the three hospitals fully leased till 2042.
ParkwayLife REIT will inject $150 million of Renewal Capex to improve and upgrade the hospitals, most of which will be spent on Mount Elizabeth. In addition, the manager has obtained a right of first refusal for Mount Elizabeth Hospital Novena. This would be DPU and yield accretive based on ParkwayLife REIT’s DPU yield of 2.98% as at Sept 29.
