Indicative valuation changes; non-core asset sales update

Northwest Healthcare Properties Management Limited, the manager of Vital Healthcare Property Trust (Vital), advises that it expects Vital to record a property revaluation loss of ~NZ$145m for the six months ended 31 December 2023, with ~44% of the portfolio (by value) having been independently valued.

This preliminary draft revaluation loss represents a ~4.4% decrease since 30 June 2023 comprising a ~5.0% decrease for the Australian portfolio and a ~2.7% decrease for the New Zealand portfolio. The primary driver of this indicative result is ~16 basis points of softening in the weighted average capitalisation rate for the portfolio (~14 basis points softening for Australia and ~16 basis points softening for New Zealand).

The indicative weighted average capitalisation rate is expected to be ~5.21% at 31 December 2023 reflecting ~5.02% for the Australian portfolio and ~5.61% for the New Zealand portfolio.
The indicative revaluation loss referred to above is subject to audit and final board approval which will be confirmed when Vital’s interim results are released (expected to occur on 15 February 2024).

Consistent with announcements made in November 2023, Vital has also sold five aged care assets leased to Hall & Prior for NZ$65m reflecting a ~1% discount to the 30 June 2023 book value. Settlement occurred on 19 December 2023 with proceeds used to repay debt.

Over the last 12 months, Vital has sold ~NZ$220m of non-core assets at a weighted average discount of ~8.2% to the 31 December 2022 book values and has a further ~NZ$90m under conditional contract.

Indicative valuation changes to 31 December; non-core asset sales update 159kb Download