Vital Healthcare Property Trust

Thursday 14th January 2016

Vital Healthcare Property Trust (VHP.NZ) is an NZX-listed investment fund that invests in high-quality health and medical-related properties in New Zealand and Australia. VHP’s tenants are hospital and healthcare operators who provide a wide range of medical and health services and carry out vital research. VHP is the only medical and healthcare property investment fund listed on the NZX.

VHP’s properties are diversified and has historically included ownership of surgical and medical facilities, primary healthcare and health support facilities and aged care facilities. The Company operates in both Australia (74%) and New Zealand (26%). The Trust is managed by Vital Healthcare Management Limited and Vital is owned by NorthWest Value Partners Inc. - a private real estate investment firm based in Toronto, Canada.

The units were listed in September 1999. Previously it used to be called ING Property Trust and on 1 October 2010 the company changed its name to Vital Healthcare Property Trust. The Trust’s portfolio includes Apollo Health and Wellness Centre in Albany and Ascot Hospital in Remuera suburbs of Auckland.

Vital Healthcare Property Trust, the listed hospital owner and developer, increased annual earnings 4.6 percent, beating estimates, as it generated increased rents from an expanding Australian business, while flagging a bigger return for investors in 2016.

Distributable earnings, the preferred measure for property investors because it strips out unrealised movements in the value of property, rose to $36.4 million, or 10.6 cents per unit, in the 12 months ended June 30, from $34.7 million, or 10.4 cents, a year earlier. Net profit more than doubled to $96.5 million, including an $84 million gain on the value of Vital's property portfolio. About 93 percent of that uplift came from the trust's Australian properties, and 70 percent was on sites that had recently undergone redevelopment.

Vital lifted net property income rose 2.5 percent to $59.4 million, with Australian rents up 4.5 percent to $46 million, offsetting a 4.3 percent decline in New Zealand income to $13.4 million.

The board declared a fourth quarter distribution of 2 cents per unit, taking the annual return to 8 cents per unit, and the property investor intends to raise that to 8.1 cents in the 2016 financial year.

Vital's property portfolio consists of 25 sites in Australia and New Zealand, with more than 1,600 hospital beds and 70 operating theatres. The portfolio was valued at $781.9 million as at June 30, compared to $613.1 million a year earlier, and had a weighted average lease term of 17.6 years, up from 15.1 years. The trust incurred management fees of $4.9 million in the year, and an incentive fee of $3.8 million payable via 2.3 million units. That's up from a management fee of $4.6 million, plus incentives fees of $542,000 in 2014.

Read the whole report at shop.sharechat.co.nz

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