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Vital Announces First Quarter Results

Tuesday, 10 November 2020

NorthWest Healthcare Properties Management Limited (NorthWest), as manager of the Vital Healthcare Property Trust (Vital), is pleased to provide an update on the quarter ended 30 September 2020 (Q1FY21).

Vital recorded a 9.1% increase in net property income over Q1FY21 compared to the first quarter of FY20. This increased income plus lower expenses led to a 30.4% increase in operating profit and a 35.0% increase in AFFO per unit.

For the 12 months ended 30 September 2020, Vital recorded a total return of 12.7% (unit price appreciation plus distributions) versus the benchmark S&P/NZX All Real Estate Index which recorded a fall of 4.3%. This represents a 17.1% outperformance by Vital compared with its peers.

Vital's existing ~$250m development pipeline remains underway with significant progress recorded during Q1FY21 in both New Zealand and Australia. In addition, approximately $100m of new brownfield developments were announced following the end of Q1FY21 including:

1. A$22.6m expansion and upgrade of Belmont Private Hospital. This is a specialist mental health facility approximately 12kms from Brisbane's CBD, leased to Healthe Care (Australia's third largest private hospital operator) for 25 years. Following the development, it will comprise 183 beds.

2. A$18.6m expansion of Abbotsford Private Hospital. This is a 30-bed specialist mental health and addiction treatment facility approximately 3kms from Perth's CBD, leased to Healthe Care for 21 years. Following the development, it will comprise 77 beds.

3. A$21.7m stage one development of a new health precinct in Adelaide to be known as Playford Health Hub. This property is adjacent to South Australia's third largest public hospital, Lyell McEwin. This first stage is expected to comprise a mixture of parking for the public health department and ancillary retail. Future stages are expected to comprise a major medical office building and private hospital.

These developments will be partially funded by the $157.5m equity raising undertaken in October and November 2020. A full development list is included on page 3 of the update attached.

Vital's weighted average lease expiry increased to 18.5 years from 18.1 years at 30 June 2020 primarily due to successful leasing (lease extensions, renewals and new leases). This market leading WALE is expected to be further enhanced by the developments referred to above, providing income security for unitholders.

Vital’s portfolio is valued at just under $2.2 billion at 30 September 2020. 

Vital has received credit approved offers to extend the duration of both the A$125m facility expiring in March 2021 and the A$115m facility expiring in October 2021 from its existing financiers. Pricing is in line with current market conditions, and work is continuing on executing Vital's capital management strategy to diversify financiers and introduce longer duration debt facilities to the Trust.

An extensive fee and governance review was undertaken in 2019 and approved by unitholders at the 2019 Annual Meeting. This review included lowering base management fees which saved unitholders $2.2m in FY20. The appointment of Graham Stuart as Independent Chairman following the 2020 Annual Meeting (subject to his re-election) completes these governance changes following which the Board of Vital’s manager will be led by an Independent Chairman, will comprise a majority of Independent Directors and its Audit Committee will continue to be chaired by an Independent Director.

Vital's Annual Meeting is scheduled for 17 November 2020. We encourage you to attend in person or on-line. Details are available at vhpt.co.nz.

ENQUIRIES:
Aaron Hockly, Fund Manager - Vital Tel 09 973 7301, Email aaron.hockly@nwhreit.com

Michael Groth, Chief Financial Officer, NorthWest Healthcare Properties Management Limited, Tel +61 409 936 104, Email michael.groth@nwhreit.com

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