In February 2025, Stage 2 of the complete redevelopment of Wakefield Hospital was officially opened by Health Minister Simeon Brown. This redevelopment has taken over five years of construction in addition to several years of planning and preparatory works. Valued at over $183m and with a remaining lease term in excess of 30 years, this is one of Vital's marquee assets and its redevelopment will provide material benefit for patients, staff and the community.
FY25 Third Quarter Update
1 JANUARY 2025 - 31 MARCH 2025
Market leading WALE of ~19 years |
>99% rent collected YTD |
Diversified tenant base with no single tenant representing more than 19% of rent |
No exposure to Heathscope |
No debt expiring until March 20271 |
Q 3 DISTRIBUTION
Payment date 20 June 2024
Ex date 5 June 2024
2.4375cpu
Q3 CASH
DISTRIBUTION
DRP active with a 2% discount reintroduced
9.75 cpu
ANNUAL
DISTRIBUTION
0.6316 cpu
IMPUTATION CREDITS
Dear Unit Holders
This quarterly update provides an overview of Vital's performance for the three months ended 31 March 2025 as well as year-to-date (YTD) performance. A summary of the financial and other results are presented on the subsequent pages of this report.
Market update
Unit Holders will likely be aware of global share market turmoil particularly over recent weeks as well as on-going issues with the Australian private healthcare sector centred around Healthscope. Despite this volatility, Vital's relative income security derived from its long weighted average lease expiry to high quality tenants remains.
Our strategy of reducing single tenant exposure, focusing Vital's investment into core healthcare precincts and continually upgrading the portfolio has put Vital in the best possible position to weather these external events.
Importantly, Vital has collected over 99% of rent YTD and has no exposure to Healthscope.
Wakefield expansion
Today, Vital approved a NZ$11.5m expansion project at Wakefield Hospital. This project expands the capacity of Wakefield Hospital by developing an additional 34-bed ward in the level 5 shell space. This project will deliver investors a compelling value add outcome at one of Vital's top performing properties and continues Vital's long standing partnership with
Evolution Healthcare in the transformation of this property since its acquisition in 2017.
Leadership change
As Unit Holders may be aware, after 5.5 years leading Vital, I am stepping down as Fund Manager on 9 May 2025. As a result, this will be my last formal communication with you. I have appreciated meeting and engaging with so many of you across the length and breadth of New Zealand and beyond.
During this period, I am most proud of:
Our significantly improved relationships with Unit Holders;
The growth in Vital's property portfolio particularly in New Zealand;
Vital's asset recycling programme, divesting out of older, smaller and less strategically
aligned assets and reinvesting into the next generation of healthcare assets; and
Our achievements in sustainability. Importantly, I remain a Unit Holder in Vital and therefore remain invested in the ongoing success of the Trust.
I'm also pleased to be handing over to Chris Adams (details over page). Chris has a long standing relationship with Vital and has been part of the Vital leadership team since 2017. This leaves Vital in good hands.
Aaron Hockly
Fund Manager 8 May 2025
Wakefield Hospital official opening
The Distribution Reinvestment Plan (DRP) is active providing Unit Holders with a low cost way of increasing their holding in Vital. Vital uses DRP proceeds to fund developments and other capital works thereby improving the portfolio.
Note a 2% discount has been reinstated
1 Incorporating refinance completed in April 2025
VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD THIRD QUARTER UPDATE FY25 | 1
2.6% $2.51
Vital leadership
INCREASE IN NET PROPERTY INCOME OVER Q3
NTA
PER UNIT
From 9 May 2025, Chris Adams, Co-Head of Northwest Healthcare for the Australian and New Zealand region, will assume Aaron Hockly's previous Fund Manager responsibilities. Chris brings over 25 years of experience in the healthcare property sector, including as a founding executive of Generation Healthcare REIT, which was acquired by Northwest in 2017. Chris had previously played a key role in establishing Vital's presence in Australia in 1999 after holding various roles within the group in New Zealand.
Full biographies of Chris and other directors and executives available at: https://www.vitalhealthcareproperty.co.nz/board-management/
Portfolio overview*
~19 years
WEIGHTED AVERAGE LEASE EXPIRY ( WALE)
~NZ$3.2bn
PORTFOLIO VALUE
GEOGRAPHIC DIVERSIT Y
68%
AUSTRALIA
32%
NEW ZEALAND
PRIVATE HOSPITALS
77.5%
SUB- SECTOR EXPOSURE
AMBULATORY CARE
18.5%
SUB- SECTOR EXPOSURE
LIFE SCIENCE
4%
SUB- SECTOR EXPOSURE
Finance update
~NZ$110m of additional hedging entered into in Q3 increasing total debt hedged to ~77%.
Post quarter end Vital refinanced ~NZ$165m in debt facilities. Highlights of these debt facility changes include:
Development achievements
Sustainability focus
During the quarter, Vital continued to support one of its key charitable partners, Keystone Trust. Keystone provides young people held back by inequality with access to education in the property or construction sector.
Key activities during Q3 included providing:
The Ormiston Hospital Expansion project
Finalist in the Warren & Mahoney Civic, Health and Arts Property Award at the 2025 Property Industry Awards
a financial scholarship with additional mentoring and other support to a property and commerce student at the University of Auckland (photo below);
22 Keystone Trust students with the opportunity to visit an operating hospital and tour a new hospital development to aid in their learning of property and development; and
an intern opportunity for a Keystone scholar to work in Vital's Auckland office for ~2 months.
Vital has no debt maturing until March 2027
Facilities converted to multi-currency (A$ and NZ$) providing enhanced flexibility
Average debt duration extended to 2.9 (+0.2) years
Macarthur Health Precinct, NSW
(31 March 2025 proforma)
Vital has reintroduced a 2% discount to its DRP. Proceeds from the DRP are used to fund capital works for operating partners such as the NZ$11.5m of fit-out works at Wakefield Hospital recently agreed to.
Ormiston Hospital, Auckland
Macarthur Health Precinct Stage 1
awarded a 6 Star Green Star As Built certification
*All figures calculated by value as at 31 March 2025. Unless otherwise noted, photos on pages 2 and 3 are from the official openings of Wakefield Hospital in Wellington and the Macarthur Health Precinct in Sydney
VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD
THIRD QUARTER UPDATE FY25 | 2
VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD
THIRD QUARTER UPDATE FY25 | 3
Q 3 UPDATE
Like-for-like
Financial Performance (unaudited)1
YEAR- TO- DATE UPDATE
Year-to-date Financial Performance (unaudited)
Official opening of Playford Health Hub (stage 2) in Adelaide
Chris Adams officially opened Specialist Medical Centre at the Playford Health Hub, SA in February 2025
For the period | 3 months to 31 Mar 25 $000s | 3 months to 31 Mar 24 $000s | Variance $000s | Change % |
Gross property income | 42,971 | 39,341 | ||
Property expenses | (8,326) | (5,889) | ||
Like-for-like net property income | 34,645 | 33,453 | 1,193 | 3.6% |
Net property income from acquisitions/disposals | 16 | 2,238 | ||
Net property income from developments | 2,322 | 383 | ||
Straight-line rent / amortisation of incentives | (664) | (663) | ||
Non-recurring items | - | 684 | ||
Foreign exchange | 699 | - | ||
Net property income | 37,019 | 36,096 | 923 | 2.6% |
Financial Position (unaudited)
As at
31 Mar 25
Assets Investment properties Investment properties - held for sale | 3,167,269 44,129 | 3,230,546 - | (19,148) (0.6%) | |
Other assets | 37,233 | 35,072 | ||
Liabilities | ||||
Borrowings | 1,360,710 | 1,323,523 | 37,187 | 2.8% |
Other liabilities | 189,281 | 198,726 | ||
Debt to gross assets | 41.9% | 40.5% | 1.4% | |
Total Unit Holders' funds | 1,698,640 | 1,743,366 | (44,726) | (2.6%) |
Units on issue (000s) | 677,083 | 676,561 | ||
Net tangible assets ($/unit) | 2.51 | 2.58 | (0.06) | (2.7%) |
Period end NZD/AUD exchange rate | 0.9087 | 0.9049 | ||
$000s
31 Dec 24
$000s
Variance
$000s
Change
For the period | 9 months to 31 Mar 25 $000s | 9 months to 31 Mar 24 $000s | Variance $000s | Change % |
Gross property income | 133,546 | 125,873 | ||
Property expenses | (22,220) | (17,379) | ||
Net property income | 111,326 | 108,494 | 2,832 | 2.6% |
Corporate expenses | (3,854) | (3,717) | ||
Management fees (base & incentive) | (13,292) | (18,567) | ||
Strategic transaction expenses | (2,862) | - | ||
Net finance expenses | (34,062) | (30,111) | ||
Operating profit | 57,256 | 56,099 | 1,157 | 2.1% |
Non-operating gains/(losses) Fair value gain/(loss) on investment property | (107,419) | (140,818) | ||
Net gain/(loss) on disposal of investment property | (1,928) | (2,897) | ||
Fair value gain/(loss) on derivatives | (16,668) | (17,224) | ||
Realised & unrealised gain/(loss) on foreign exchange | (248) | (239) | ||
Profit/(Loss) before income tax | (69,007) | (105,079) | 36,072 | 34.3% |
Current and deferred taxation | 4,746 | 5,726 | ||
Profit/(Loss) for the period attributable to Unit Holders of the Trust | (64,261) | (99,353) | 35,092 | (35.3%) |
Funds from Operations (FFO) | 53,228 | 55,364 | (2,137) | (3.9%) |
Adjusted Funds from Operations (AFFO) | 52,529 | 55,035 | (2,507) | (4.6%) |
AFFO per unit | 7.78 | 8.24 | (0.45) | (5.6%) |
Weighted average units on issue (000s) | 675,433 | 667,879 | 7,554 | 1.1% |
Average NZD/AUD exchange rate | 0.9077 | 0.9272 |
%
1 On a 'constant currency' basis. Figures may not sum due to rounding.
Important note: The information in this investor update is general information only and does not contain all information necessary to make an investment decision. The financial information in this investor update has not been audited. No representation or warranty, express or implied, is made to the accuracy, adequacy or reliability of information in this update, including the financial information. This investor update contains forward looking statements which are inherently susceptible to uncertainty. Vital's actual results may vary materially from those expressed or implied in this investor update. The Manager is under no obligation to provide any update to information included in this update, including as a result of the audit process.
VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD
THIRD QUARTER UPDATE FY25 | 4
VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD
THIRD QUARTER UPDATE FY25 | 5
vhpt.co.nz
Wakefield Hospital, Wellington
~NZ$64.5m remaining to be spent on Committed Developments
Development | Description of Works | Development Cost1 | Cost to Complete | Forecast Net Return | Forecast Completion date |
Australia | |||||
GCHKP - RDX (QLD) | 9 level research and development centre of excellence and 3 level 181 bay basement car parking. | 133.6 | 24.1 | 5.6%2 | Mid-25 |
Total Australian Developments A$m | 133.6 | 24.1 | 5.6% | ||
Total Australian Developments NZ$m | 147.0 | 26.5 | 5.6% | ||
New Zealand | |||||
Grace Stage 1 (NZ TRG) | Fitout of 2 theatres, Endoscopy & 10 beds. | 36.7 | 14.8 | 5.5% | Mid-26 |
Endoscopy Auckland (NZ AKL) | New Endoscopy clinic. | 32.2 | 8.0 | 5.4% | Mid-25 |
Boulcott (NZ LH) | 2 theatres, PACU expansion & conversion. | 24.8 | 3.7 | 5.9% | Mid-25 |
Wakefield Level 5 Expansion Works (NZ WGN) | 34 bed ward expansion of Level 5 shell space. | 11.5 | 11.5 | 7.0% | Late-25 |
Total New Zealand Developments NZ$m | 105.2 | 38.0 | 5.7% | ||
Total Developments in NZ$m3 | 252.2 | 64.5 | 5.6% | ||
1 Excluding Land
2 Fully leased initial yield
3 A$ converted at 31 March 2025 spot rate 0.9087
VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD