Vital Healthcare Property Trust Analysis

Overview

Vital Healthcare Property Trust (Vital) is the only specialist, NZX-listed landlord of healthcare real estate in New Zealand and Australia. Vital's portfolio is valued at ~$2.2 billion.

The manager of the Trust is NorthWest Healthcare Properties Management Limited, a subsidiary of Toronto listed global healthcare fund manager and owner, NorthWest Healthcare Properties REIT.

Performance

The following information was extracted from Vital Healthcare Property Trust's Full Year Results, released on 8 August 2024:

Northwest Healthcare Properties Management Limited (the Manager), as manager of Vital Healthcare Property Trust (Vital), has today released its results for the 12 months ended 30 June 2024 (FY24).

Despite a challenging environment, Vital recorded Adjusted Funds from Operations (AFFO) of 10.9 cpu enabling payment of 9.75 cpu in distributions, consistent with guidance, on a prudent 89.4% payout ratio. The Manager also continued to progress several strategic initiatives including the sale of non-core assets, key ESG initiatives, capital partnering, increasing hedging and maintenance of balance sheet gearing below 40%.

Fund Manager, Aaron Hockly, said: “During FY24 NZ$251.3m of non-core assets were sold and five developments, totaling NZ$197m, were completed. Recycling capital from sales into developments, in addition to leasing, has enabled us to maintain Vital’s market leading WALE at 18.3 years and improved Vital’s property portfolio across a range of metrics including lowering the average building age, increasing exposure to healthcare precincts, green buildings and key markets including New Zealand.”

“Vital’s remaining committed development spend of ~NZ$138m is fully funded from existing debt headroom of ~NZ$158m. In addition, ~NZ$180m of asset sales are in due diligence to complete Vital’s asset sales programme” Hockly continued.

FY24 highlights include:

Vital was acknowledged as Sector Leader (the highest possible achievement) by GRESB for ESG in healthcare for listed entities globally across performance, management and developments.
A 3.7% increase in underlying net property income (NPI) primarily reflecting the impact of development income and rent reviews (on a same-property, constant currency basis).
Divestment of NZ$251.3m of non-core assets at a 7.5% discount to previous book values.
Practical completion was reached at five developments with a total development cost of NZ$197m:
10.90 cpu in AFFO, a 2.5% decline from FY23.
Maintenance of distributions at 9.75 cpu (consistent with guidance) on a prudent 89% AFFO pay-out ratio.

In any given GDT Event the GDT website may display a range of results other than price, as explained:

' – ' means that the product was not offered.
‘n.s.’ (not sold) means that no product was sold.
‘n.p.’ (not published) means that product was sold at the starting price, and therefore GDT cannot publish the winning price. For an explanation of this rule, see question 9 in the "Common questions" page under "About GDT" at www.globaldairytrade.info
'n.a.' for the Average Winning Price means that no prices were available for that contract period (for the reasons above), and therefore no average price was applicable.

For clarification where GDT publishes ' – ' or ‘n.s.’ (not sold) NZX results will also display a '-' or 'n.s'.

Where the GDT website displays ‘n.p.’ (not published), NZX will display the starting price. Note that the NZX results page will not differentiate between prices that are equal to starting price or those that have exceeded starting prices.

'n.a.' for the Average Winning Price as displayed on the GDT website are not displayed on this results page.

Note that N/A in the table below means there has been no change between current and previous price.