Vital Healthcare Property Trust · NZX:VHP
Vital Healthcare Property Trust — HY2025 Earnings Presentation
41 slides from Vital Healthcare Property Trust's earnings presentation, Feb 20, 2025
Slide 1: HY25 interim results presentation
20 FEBRUARY 2025 HY25 interim results presentation Providing income security for our Unit Holders Ormiston Hospital (Stage 1), Auckland
Slide 2: Contents and Presenters
Contents Presenters Defensive Australasian healthcare property portfolio 3 Aaron Hockly SENIOR VICE PRESIDENT AND FUND MANAGER HY25 highlights 4 Financial results and capital management8 Michael Groth CHIEF FINANCIAL OFFICER Portfolio14 Health sector overview 17 Richard Roos Developments20 CO-HEAD A
Slide 3: Defensive Australasian healthcare property portfolio
Defensive Australasian healthcare I NCOM E STA B ILIT Y GROW IN G property portfolio DEMAN D Consistently growing net property Ageing demographics and growing income reflecting tenant quality and populations improving industry dynamics Rising life expectancy VITAL IS THE ONLY SPECIALIST HEALTHCARE L
Slide 4: HY25 highlights
HY25 highlights Prime Minister and local MP, RT Hon. Christopher Luxon officially opened the Ormiston Hospital Expansion in October 2024
Slide 5: HY25 highlights
HY25 highlights NON-CORE ASSET SALES AND DEVELOPMENTS HAVE HELPED IMPROVE THE RESILIENCE OF THE PORTFOLIO 18% NZ$47.9m 4.0% OF V I TA L ' S N E T L E T TA B L E N O N - CO R E ASS E T LIKE-FOR-LIKE NET A R E A L E AS E D O R R E N E W E D S A L E S OV E R H Y 25 P R O P E R T Y I N COM E G R OW T H
Slide 6: Sustainability
Sustainability Climate Related GRESB CDP First 6 Star Green Star Disclosure Certified Development Vital was again acknowledged Vital submitted to CDP again To assist Vital’s stakeholders to as a Sector Leader in October in 2024, achieving a score of GenesisCare Integrated Cancer better understand Vi
Slide 7: Dual Listed Trust (DLT) update
Dual Listed Trust (DLT) update What have we done? What have we heard? What happens next? Why are we doing this? Consultation on a proposal to Positive feedback particularly for Not proceeding with DLT DLT was expected to be earnings restructure Vital into separate New the objectives of providing ear
Slide 8: Financial results and capital management
Financial results and capital management Minister of Health the Hon. Simeon Brown officially opened stage 2 of the redevelopment of Wakefield Hospital in February 2025
Slide 9: Financial performance
Financial performance SO LID A B S OLUT E N E T PR O PE R T Y INC O ME G R O WTH D ES P ITE P O RTFO LIO ENH ANC ING NO N-C O RE ASS E T SAL ES AC T UA L AC T UA L (%) Like-for-like rental growth strong at 4.0%. Lower absolute HY2025 HY2024 C HA N GE rental growth reflective of portfolio enhancing d
Slide 10: Net property income
Net property income Headline growth impacted by non-core assets sales which have improved Vital's overall property portfolio 4.0% NPI LI KE-FOR-LIK E G R O W T H D U E TO L E ASING, D EV ELO PM ENTS AND RENT REV IEWS +2.6% growth (incl FX) / +1.5% (excl. FX) Income from completed N E T P R O P ER T
Slide 11: Balance sheet
Balance sheet SO LID B A L AN C E S H E E T MA INTA INE D 31 DE C 24 30 JUN 24 (%)C HA N GE Stable due to portfolio enhancing non-core asset sales Investment properties 3,230,546 3,239,973 (0.3%) and property revaluations, offset by development spend Other assets 35,072 64,786 (45.9%) and FX movemen
Slide 12: Leverage supported by cashflows
TO BE UPDATED Leverage supported by cashflows V I TAL' S DE BT I S S UP PO R T E D BY INC O ME W HIC H IS TRANS PARENT, LO NG DAT E D AN D DE F E NSIV E B A NK FAC ILITIES 31 D E C 2024 30 JUN 2024 Leverage remains appropriate given the Debt to gross assets (Trust Deed) 1 40.7% 39.1% transparency, q
Slide 13: Interest rate hedging profile
Interest rate hedging profile INTER EST R AT E C OSTS SU B STA NT IA L LY HE D G E D F O R OV ER 2 YEARS TO H ELP M ANAG E RIS K H E D G ING MATU R IT Y PRO FILE (A$) 1,200 4.50% 1,000 4.00% Hedging activity totalling A$385m 3.50% completed in HY25. Key components: 800 3.00% 2.50% 3.61% weighted ave
Slide 14: Portfolio
Portfolio Maitland Private Hospital, NSW
Slide 15: Portfolio overview
Portfolio overview AUSTR A L AS I A' S H I GH E ST Q UA L IT Y INV E STA B L E HEALTH C ARE P O RTFO LIO CPI aligned leases support income growth G EO G RAP H IC D IV ERS IFIC ATIO N (BY VALUE) 97.7% 4.0% growth for same properties on a like-for-like and constant currency basis; 2.6% growth in net p
Slide 16: Asset management continues to achieve results
Asset management continues to achieve results During HY25, over 47,000 square metres was leased, extended or renewed through active asset management. This represents 21% of Vital's total income and 18% of portfolio area. Successful leasing of existing and newly developed space reflective of Vital's
Slide 17: Health sector overview
Health sector overview Ormiston Hospital (Stage 1), Auckland
Slide 18: Market dynamics
Market dynamics AUSTR A L AS I A' S H I GH E ST Q UA L IT Y INV E STA B L E HEALTH C ARE P O RTFO LIO Market context Demand for healthcare services continues to increase, The private sector is fundamental to the delivery driven by an ageing and growing population with high of healthcare services acr
Slide 19: Market dynamics (cont'd)
TO BE DESIGNED Market dynamics (cont'd) SEC TO R I S I M P LE M E NT ING C O ST R E D U C TIO N MEAS URES, ADV O C ATING FO R INC REAS ED FUND ING AND PRIORIT ISIN G EF F ICIEN CY. RISIN G BAR R I ERS TO E N T RY A R E R E ST R IC T ING NE W C O M P E TITIO N Market context What this means for Vital
Slide 20: Developments
Developments Playford Health Hub (Stage 2), SA
Slide 21: Development strategy
Development strategy Strategy Achievements Current focus Continue to develop through Several large developments Vital has several shovel ready the cycle to enhance close to completion projects across Australia Vital’s portfolio, support reducing capital required and New Zealand that can operating pa
Slide 22: Committed development pipeline
Committed development pipeline RDX, Queensland NZ$241.3m NZ$77.5m NZ$73.8m 5.58% committed remaining expected to be spent weighted average developments to be spent over the next 12 months development yield (funded through existing debt capacity) VITAL HEALTHCARE PROPERTY TRUST | INTERIM RESULTS HY25
Slide 23: Developments completed during HY25
Developments completed during HY25 Practical Completion achieved at NZ$277m of developments over CY24 Wakefield Hospital Stage 2 Maitland Private Hospital Asset Type Hospital (Acute) Asset Type Hospital (Acute) Total Cost A$16.0m Total Cost NZ$91.5m (tenant has invested over $30m in this asset inclu
Slide 24: Future focus
Future focus Tē tōia, tē haumatia, kia rite, kia mau. Nothing can be achieved without a plan, workforce and a way of doing things. Be prepared to take action. Avive Clinic, VIC
Slide 25: Outlook and guidance
Outlook and guidance C ONTINU E D DE LI V E RY A ND F O C U S O N A D D ING VALUE AND EARNING S G RO WTH Guidance Sector tailwinds and Vital's Strategic focus unique offering FY25 distribution Unit Holders benefit from low risk portfolio: high income Maintenance of appropriate balance sheet Committe
Slide 26: Appendices
Appendices Ormiston Hospital (Stage 1), Auckland
Slide 27: Committed developments – Australia and New Zealand
Committed developments – Australia and New Zealand DEVELOPM E N TS E N H A NC E E A R NING S G R O W TH AND IM P ROV E ASS E T Q UALIT Y ALL VALUES SHOWN IN $M DESCRIPTION OF WORKS DEVELOPMENT LAND SPEND COST TO FORECAST FORECAST STATUS COST1 VALUE TO DATE COMPLETE NET RETURN COMPLETION DATE Austral
Slide 28: Adjusted funds from operations (AFFO)
Adjusted funds from operations (AFFO) C ONS ER VAT I VE PAYO U T R ATIO R E TA INE D HY2025 HY2024 (%) CHA NG E Operating profit before tax and other income 36,475 37,480 (2.7%) AFFO impacted by Add/(deduct): portfolio enhancing Current tax expense (9,920) (12,532) (20.8%) non-core asset sales, Stra
Slide 29: Net Tangible Assets
Net Tangible Assets REVALUAT I ON LOSS H AS L E D TO SMA L L NTA D E CLINE P ER UNIT NTA P E R UNIT BRIDG E (HY25) Fall mainly due to (unrealised) property revaluations $2.80 $2.70 $2.69 ($0.08) $0.01 ($0.01) ($0.02) $2.60 ($0.01) $2.58 $2.50 $2.40 FY24 Property revaluations Currency translation Ret
Slide 30: Movement in investment property
Movement in investment property STRO NG C P I LI N KE D H E A LTH C A R E PO R T F O L IO O FFS E TS C AP RATE S O FTENING TOTA L P ORTF OLIO VALUE B RI DG E (1H H Y25) (N Z$ M I L LI O N S) $3,500 +85 (66) 3,240 (48) +20 3,218 $3,000 1 Includes development expenditure and capitalised interest costs
Slide 31: Comparative returns
Comparative returns V I TAL M AI N TAI N S LO NG-T E R M O U TPE R F O R MA N C E VS BENC H M ARK O N A TOTAL RE TURN 1 BAS IS TOTAL RETURN 1 TO 31 DECEMBER 2024 1YR 5YR 10YR INCEPTION V H P VS S&P NZ X REAL ESTAT E IN DEX Vital (13.0%) -4.8% 5.7% 9.2% 1000 Vital S&P/NZX All Real Estate Index S&P/NZ
Slide 32: Australian portfolio overview
~NZ$2.2bn Australian portfolio overview GEO GR A P H I C A LLY D ISPE R SE D AU STR A L IA N PO R TFO LIO IM P ROV ING AS WID ER IND USTRY IM P ROV ES MEDICAL OFFICE BUILDINGS PRIVAT E HOSPITALS 24% % 15 hospitals (acute and specialty – 24 R mental health, rehabilitation) HE OT 5 hospital operators
Slide 33: New Zealand portfolio overview
~NZ$1.0bn New Zealand portfolio overview KEY NEW Z E A L AN D M A R K E T C O NTINU E S TO PE RFO RM STRO NG LY PRIVATE HOSPITALS 9 hospitals (all acute) MEDICAL OFFICE BUILDINGS 6 hospital operators 18% 82% of NZ portfolio value; 18 % 84% of NZ rent ER H T WALE: 19.5 years O AMBULATORY CARE % 82 L
Slide 34: Investment properties
Investment properties AS AT 31 D EC EM BER 2024 ~NZ$3.2B N P OR T FOLIO O F HE A LTH C A R E R E A L E STATE C O M P RIS ING 34 INV ESTM ENT P RO P ERTIES AND 2100+ L ICEN SED BEDS CLICK ON ONE OF THE UNDERLINED PROPERTIES TO SEE A FLY-THROUGH OF THAT PROPERT Y Western Australia (2) Queensland (2) N
Slide 35: Lease expiry profile
Lease expiry profile LO W RISK E XP I RY P R O F IL E SU PPO R TS SU STA INA BLE, P RED IC TABLE AND D EFENS IV E C AS H FLO WS CY25 EXPIRIES 10-year average annual lease expiry of only 1.58% (as % of total portfolio income) Total potential expiries of NZ$0.5m or 0.3% of annual rent through to 5.0%
Slide 36: Rent reviews undertaken in HY25
Rent reviews undertaken in HY25 H I GH P E R C E N TAGE O F TOTA L R E NT IS R E V IE W E D ANNUALLY WITH STRUC TURED 1 REV IEW M EC H ANISM S Jun-24 Rent p.a. Dec-24 Rent p.a. Increase Annualised Growth # (NZD) (NZD) (NZD) (Stable currency) Rent reviews have been Australia AUS 30 11,348,849 11,632,
Slide 37: Rent review profile
Rent review profile Greater of Market or CPI (0%) No Review (2.2%) Stepped / Structured BREAK DO WN OF (0.8%) PO RTFO LI O CPI REVIEWS Fixed <3% (2.2%) TYPE % Lesser of CPI and 3% (17.6%) Fixed 3%+ (8.0%) CPI - Un-Capped 33.0% Market Review CPI - 2.5% Cap 1.3% (0.8%) CPI - 3% Cap 3.9% CPI with rollo
Slide 38: Core portfolio metrics
Core portfolio metrics 5 Y EAR T R E N D S H I GH L IG H T PO R TF O L IO STRENGT H A N D C ON T INU E TO LO NG-T E R M P E R FOR M A NC E O C C UPANC Y WALE 20 100% 99.1% 99.0% 19.0 19.1 98.4% 98.2% 97.7% 19 18.5 98% 18 17.8 96% 17.2 17 94% Long-term track record of maintaining 92% 16 ~98% occupanc
Slide 39: Glossary
Glossary AFFO Adjusted Funds From Operations is an alternate measure used for assessing distributable income. Essentially adjusts net profit after tax for non-cash/non-recurring items (i.e. NDI) then makes adjustments for items such as maintenance capex. Cap Rate Capitalisation Rate. Generally calcu
Slide 40: Disclaimer
Disclaimer This document has been prepared by Northwest Healthcare Properties Management Limited (the Manager) as manager of the Vital Healthcare Property Trust (the Trust). This document provides general information only and is not intended as investment, legal, tax, financial product or financial
Slide 41: Thank you
Thank you www.vhpt.co.nz Ormiston Hospital (Stage 1), Auckland
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