$175m property revaluation gain anticipated for 2H FY21

NorthWest Healthcare Properties Management Limited (the Manager), as manager of Vital Healthcare Property Trust (Vital), advises that it expects Vital to record $175m of property revaluation gains over the second half of the financial year ended 30 June 2021. This is a 7.8% increase since 31 December 2020, is in addition to the $61m recorded for the six months ended 31 December 2020 and equates to a full year gain of $235m (subject to rounding), a 11.3% increase.

This revaluation gain, after allowing for $269m completed acquisitions, $127m of capital additions (primarily development), $101m of disposals and FOREX impacts, would take Vital’s property portfolio above $2.63 billion with a weighted average capitalisation rate (WACR) of 4.88%. This is 45 basis points below Vital’s WACR at 31 December 2020 and 66 basis point below Vital’s WACR at 30 June 2020.

Vital’s Fund Manager, Aaron Hockly, said:

“Healthcare property continues to attract increased investor demand with investors drawn to the relatively low risk and low volatility of the sector’s cash returns. Increased transactional evidence in healthcare property, across both the direct and indirect (M&A) markets particularly in Australia, has provided support for the indicative valuation increases noted above.

The FY21 valuation gain noted above includes ~$30m of development margins and ~$17m due to rental increases and leasing.”

The indicative revaluation gain referred to above is subject to audit and will be confirmed when Vital’s full year results are released on 12 August 2021.

050821 Valuation Changes 232kb Download