Third Quarter Update – FY 2022

NorthWest Healthcare Properties Management Limited today released the attached Q3 update for Vital Healthcare Property Trust (Vital). The update included the following:

During the quarter, Vital announced the acquisition of development land to expand “The Hills Clinic” an existing mental health facility in north-west Sydney. The land will be leased to Aurora Healthcare as part of the existing lease (25 years remaining) enabling a~A$50m (includes land acquisition price) expansion of the existing hospital at an initial yield of ~5%. Aurora is Australia’s largest specialty private mental health provider with 1,000 beds across 16 facilities. Following completion of this expansion and other committed development projects, Vital will have~1,300 mental health beds in its portfolio (all currently in Australia).

Also during the quarter, Vital acquired 27,480 square metres of land in western Sydney which is expected to be developed in three stages:

1. ~A$52 million (includes land acquisition price) four-storey cancer centre of excellence pre-leased to GenesisCare for an initial term of 15 years providing a net yield on costs of ~4.0% with annual fixed increases.
2. ~10,000 square metres of land for development of a proposed day surgery and mental health facility. Advanced discussions are underway with one of Australia’s largest hospital operators in relation to this potential development.
3. ~13,000 square metres of land for future healthcare and ancillary development which may include education and research related uses.

In early April 2022 (after the end of Q3), Vital announced:

1. Three high-quality asset acquisitions in Christchurch, Queenstown and Auckland with an aggregate acquisition price of ~$168 million, including Vital’s strategic entry into the South Island;
2. An increase in committed developments by ~$54.5m enabling the expansion of two hospitals in Auckland;
3. A$200m equity raising through a 1 for 8.54 underwritten pro rata accelerated entitlement offer at $2.95 per unit. The rights offer is due to close on 12 May with proceeds used to support the above acquisitions and developments; and
4. That Andrew Evans would retire effective 30 June 2022 and the appointment of Angela Bull as a new independent director and member of the Audit Committee. Angela is based in Auckland, is CEO of Tramco Group (NZ owned property investment company) and an independent director of the Real Estate Institute of NZ and Foodstuffs (among other roles).

Updated committed development details (refer to the table in the attached announcement) and a revised NTA estimate of $3.23 was also provided.

Vital Third Quarter Update FY22 851kb Download