[Overseas Stocks Spotlight] "HealthPeak, Positive Portfolio Improvement"

[Asia Economy Reporter Eunmo Koo] Hana Financial Investment evaluated that Healthpeak Properties (Healthpeak Properties·PEAK.US), a U.S. healthcare REIT (Real Estate Investment Trust), shows generally stable performance, and the portfolio expansion in the life sciences and medical office sectors is positive.

Healthpeak's Q3 revenue this year increased by 11% year-on-year to $600 million, exceeding consensus by 1%, while adjusted funds from operations (AFFO), the source of dividends, recorded $180 million, down 3%, meeting consensus. Despite concerns over dividend cuts due to COVID-19 and poor performance in the senior housing sector, government subsidies and rising net operating income (NOI) in life sciences maintained AFFO per share at $0.34, the same as the previous year.

Due to strong performance in the life sciences and medical office sectors, Healthpeak raised its 2020 full-year same-store NOI growth guidance (excluding effects of acquisitions, disposals, and redevelopment assets) from 4.5% to 5.5% and from 1.5% to 2%, respectively, based on the midpoint. However, concerns about senior housing led to maintaining a 'conservative' same-store NOI growth guidance for the overall portfolio.

The life sciences sector shows stable growth with 97% of its portfolio located in key bio-clusters such as San Francisco, Boston, and San Diego. Researcher Songhee Lee of Hana Financial Investment stated in a report on the 20th, "The Q3 same-store NOI growth rate increased by 6.6% compared to the same period last year, and the rent collection rate reached 99%, indicating that the performance momentum driven by increased forward demand will continue."

The medical office sector also showed a high same-store NOI growth rate of 3.6% year-on-year, with a rent collection rate of 99%. Healthpeak is expanding its portfolio by incorporating a total of 500,000 square feet of life sciences and medical office assets this year, and 63% of the current pipeline has pre-leasing contracts signed.

On the other hand, the 'SHOP' and triple-net senior housing sectors exposed to COVID-19 risks received government subsidies totaling $17.3 million this year, but same-store NOI decreased by 19% and 4% year-on-year, respectively. Accordingly, the scale of these sectors is being reduced, with 98 and 33 assets classified as pending sales, respectively.

The stock is trading at a price-to-forward funds from operations (P/FFO) ratio of 18.5 times based on next year's expected operating funds, with an annual expected dividend yield of 4.7%. Researcher Lee evaluated, "Although there was an adjustment in healthcare REITs due to COVID-19 at the beginning of the year, considering the recent vaccine developments, a rebound is expected, making the stock price level attractive."

Additionally, "The ongoing external growth in the life sciences sector and the relatively low proportion of senior housing compared to peer groups are positive factors," and "As the senior housing market is expected to improve once COVID-19 subsides, the investment attractiveness is high from a long-term perspective," she added.

This content was produced with the assistance of AI translation services.