IHH Annual Report 2018

PLIFE REIT The Group holds a 35.66% equity interest in the real estate arm, Parkway Life Real Estate Investment Trust (“PLife REIT”). One of Asia’s largest listed healthcare REITs by asset size, PLife REIT invests in income-producing real estate and real estate-related assets used primarily for healthcare and healthcare-related purposes. PLife REIT owns a well- diversified portfolio of 50 properties with a total portfolio size of approximately S$1.86 billion as at 31 December 2018. Performance Highlights PLife REIT’s external revenue decreased by 1% to RM133.2 million due to the translation effects of a stronger ringgit. On constant currency, external revenue grew 4%, largely due to revenue contribution from the Japan nursing rehabilitation facility acquired in February 2018 and higher yielding properties acquired from an asset recycling initiative completed in February 2017. EBITDA increased 14% to RM321.7 million from the recognition of a RM50.4 million revaluation gain on its investment properties as compared to RM6.4 million in 2017. Gearing remained optimal at 36.1%. With the resilient performance and healthy liquidity position, Moody’s maintained its investment grade rating of ‘Baa2’ with stable outlook for PLife REIT. KEY FACTS RM133.2 million Revenue RM321.7 million EBITDA Outlook The long-term outlook of the healthcare industry continues to be driven by an ageing population regionally and demand for better quality healthcare, as well as aged care services. With global growth expected to slow down and macroeconomic and geopolitical uncertainties as well as volatility within the financial markets likely to persist in 2019, PLife REIT remains cautious as it continues to build on its effective growth engines with the following strategies to deliver consistent value for Unitholders and growth for PLife REIT. • Consolidate assets in Japan, generate operating synergies and derive further cost savings; • Improve portfolio quality through asset enhancement initiatives and opportunistic acquisitions; and • Manage assets proactively to improve performance, enhance competitiveness and extract further value from its overall portfolio. PLife REIT, being one of only three healthcare REITs and trusts listed in Singapore, stands in good stead to continue offering investors stability with its long average lease expiry profile and downside protected rent structure for its portfolio. 53 Performance Review