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Vital diversifies with first Western Australia acquisition

Monday, 11 August 2014

Vital Healthcare Management Limited (the Manager), the manager of Vital Healthcare Property Trust (Vital) today announced that it has unconditionally acquired the property occupied by The Marian Centre psychiatric hospital in Perth, Western Australia.

The Marian Centre is a 31-bed stand-alone private psychiatric hospital in the established medical precinct of Subiaco, Perth, Western Australia. The Marian Centre provides both inpatient and outpatient services along with a range of therapy programs.

The facility is located 6km north-west from the Perth central business district and forms part of the larger Subiaco medical precinct. The precinct includes a mixture of for-profit and not-for-profit operators offering a diverse range of medical services including pathology, neurology, oral and dental, orthopaedics, sports medicine, fertility and oncology.

Vital will acquire the property for A$13.5 million on an initial yield of approximately 8.5%. The acquisition will be funded from Vital’s existing bank facility. Settlement is expected to be mid-August.

Following settlement, Vital will undertake a A$10.8 million redevelopment and expansion project to be completed over the next 12 months to meet growing demand for services in the area. The redevelopment will see bed numbers increase from 31 to 66, refurbishment of existing ward accommodation, new lift and lobby, extension of existing dining area and provision of additional consulting suites.

The operator will be Healthe Care, Australia’s third largest for-profit private hospital operator. Healthe Care will enter into a new 20 year lease for the property, with annual CPI reviews and market reviews every ten years.

Chief Executive Officer of the Manager, David Carr said “This acquisition aligns perfectly with our strategy to acquire healthcare assets in established medical precincts and add further value by creating capacity to meet patient and operator demand. This demand is supported with Western Australia having the highest levels of private health insurance at 54%1 of the population, well above the national average of 47%.

We are pleased to have again structured an off market transaction with Healthe Care, one of Australia’s leading private hospital operators. We see this transaction as a catalyst for further opportunities in the Western Australian market, with Vital now having a diversified presence in all six Australian states.”

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