3Q12 DPU was 7.5% higher YoY at 2.58 S'', making up 25% of our FY12 estimates, which was in line with our expectations. NPI rose 9.5% YoY to S$22.1m, boosted by contribution from its GMCKL Portfolio acquired during the quarter. Revenue from Singapore properties is set to grow by 6.31% for the next 12 months. PREIT also continues to rolling out AEI opportunities for the assets under its portfolio. At S$2.15, PREIT is trading at 5.1% yield, based on FY13F DPU. PREIT remains stable, despite the ongoing economic slowdown, backed by continued strong demand for quality healthcare. It provides investors with stability and a decent yield. Maintain BUY with a TP of S$2.30.

Acquisition opportunities are there. PREIT continues to be in discussions with its sponsor and other third parties to acquire healthcare assets in Malaysia and Australia. Demand for quality private healthcare in these markets remains strong. However, due to the ongoing uncertainties, management prefers to adopt a cautious approach. Any acquisition, if at all, would likely be in 1H13. PREIT's gearing of 36.4%, with debt headroom of S$229.2m (to reach 45%) as at end 3Q12 places it in a good position to take on suitable acquisitions.

Other ways to grow: PREIT is exploring the option of engaging in asset recycling in Japan ' divest the older or lower-yield assets and replacing it with yield accretive assets. Such an option could allow PREIT to enhance the contribution from Japan assets, without expanding its Japan portfolio much.

Defensive with decent yield. PREIT may have a lower yield, compared with the average S-Reit sector. Its growth only comes from rental growth, which is backed by favourable lease structures. It is this structure that provides investors with stability during uncertain times.