Glossary

A

Acquisition yield

The rent received from a property at the date of acquisition divided by the purchase price (excluding acquisition costs). 

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B

BROWNFIELD DEVELOPMENT

The term brownfield development relates to an existing property which, due to a variety of reasons undergo building works to increase their capacity, change or expand their type of registration, add to or expand their services or simply carry out building improvements in order to meet rising demand for health related services. 

C

Capital gain/loss

The difference between an asset's purchase price and selling price.

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D

Derivative

A financial contract that derives its value from another physical asset. Examples of derivatives include interest rate swaps (IRS’s) and foreign exchange contracts (FEC’s). Derivatives help Vital mitigate exposure to interest rate and foreign exchange risk.

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E

Earnings per unit (EPU)

Calculated as profit after income tax for the period, divided by the number of units on issue.

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F

Funds from operations (FFO)

Calculated as Gross Distributable Income, less current tax charges. Interchangeable with Net Distributable Income (NDI).

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G

Gearing or loan to value ratio (LVR) 

1.Borrowing specifically to fund an investment 2. A financial term expressing the ratio of a loan to the value of an asset purchased or total assets. The term is commonly applied by looking at the level of Borrowings (or debt) versus the Total Assets, or Borrowings versus the Investment Properties.

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H

Hedging

The practice of taking a position in one market in order to balance/protect against the possible movement in another market.  Interest rate options and foreign exchange contracts are often used to hedge an investment.  

I

Imputation credit

Taxation credits calculated on a per unit basis that are passed on to unitholders who receive a distribution from holding units. 

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L

Loan to value ratio (LVR) or gearing

A financial term expressing the ratio of a loan to the value of an asset purchased or total assets. The term is commonly applied by looking at the level of Borrowings (or debt) versus the Total Assets, or Borrowings versus the Investment Properties.

M

Managed Investment Trust (MIT)

A Trust domiciled in Australia which meets specified Australian tax rules – including: Having management activities conducted in Australia; being a managed investment scheme; and conducting ‘passive activities' (e.g. acquiring real property for the purposes of deriving rental income). 

N

NET DISTRIBUTABLE INCOME

Calculated as Gross Distributable Income less current tax charges.

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O

Occupancy

The amount of income from occupied space measured against the income from the total space.

P

Payout ratio

A ratio used to describe how much of Vital’s earnings are paid out as distributions to unitholders. It is calculated by taking the DPU for the respective period and dividing it into the EPU for that same period, expressed as a percentage.

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R

REAL ESTATE INVESTMENT TRUST (REIT)

Is a trust (or company) that owns and derives rental income from real estate. REITs can be publicly listed or privately held. 

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S

Stock exchange

A market with a trading floor where securities are bought and sold. Vital is listed on the New Zealand Stock Exchange (NZX) with a ticker code VHP.NZ

T

Trust Deed

A document setting out the methods of application, investment and withdrawal of funds in a managed investment, unit trust or superannuation fund. 

U

Unit price

The price at which a Vital unit is traded on the New Zealand Stock Exchange. 

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V

Volume weighted average price (VWAP)

The weighted average of the price at which units in the Trust were sold and is calculated by adding up the total dollar value of units traded on the NZX  (price multiplied by number of units traded) and then dividing by the total units traded.

W

weighted average lease term to expiry (wale)

The average lease term remaining to expiry, weighted by income (as a percentage of total income).

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