Uplift from rent review & completed AEI. PLIFE has secured a minimum rent review of +4.36% for Singapore hospital properties (CPI + 1%) for 23rd Aug 2009 to 22ndAug 2010. All else equal, this translates to an uplift of at least 3.5% for the total portfolio according to the manager. PLIFE has completed its maiden asset enhancement initiative on a Japanese asset. It spent roughly S$2.56m on the works, which are expected to add 0.042 S cents to overall DPU.
Growth plans. After the manager's reorganization, PLIFE says it has a renewed focus on asset management and investments. It expects to launch more AEI projects and is already in discussions with operators. PLIFE says it has a new "clustering" approach to investments. The manager wants to build scale and depth in one or two countries rather than haphazardly investing everywhere at the same time. Four core target markets currently are: Singapore, Malaysia, Japan and Australia.
Debt. PLIFE is currently geared at 22.7% debt-to-assets. Its long-term target gearing is 40% but in the current environment, it says it is comfortable gearing up to 35% at most. PLIFE has secured a S$50m three year revolving Islamic credit facility from Islamic Bank of Asia. The amount is small but this is a way "for them to get to know us and our assets better". The facility is a 'back-up' in case the S$34m loan due in 2H 2010 is unable to be refinanced. If the refi is successful, these funds would be used towards building a war chest for opportunistic acquisitions. The credit market seems to have improved and the manager says it is getting several reverse enquiries. The cost of the new S$50m facility is at "sub 200 basis points" (margin only) versus existing loans priced at +160 basis points.
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