Delivers solid result and increases distribution by 2.2%

AnnualResults
FY 2018
VITALHEALTHCAREPROPERTYTRUST
09AUGUST2018
INVESTINGINAUSTRALASIAS
HEALTHCAREINFRASTRUCTURE

Contents
Presented by :
David Carr
Chief Executive Officer
Stuart Harrison
Chief Financial Officer
•H I G H L I G H T S
•S T R A T E G Y
•I N V E S T M E N T A C T I V I T Y
•S E C T O R D R I V E R S & T R E N D S
•F I N A N C I A L S
•C A P I T A L M A N A G E M E N T
•P O R T F O L I O
•P R O P E R T Y R E V A L U A T I O N S
•2 0 1 9 F O C U S
2

Highlights

Highlights
Gross rental income of $93.7m, +20.1%
1
NDI of 10.6 cpu, payout ratio of 81%
AFFO of $49.5m, +4.5%
1
NTA of $2.26, +10.2%
LVR
2
of 37.5%, up from 28.9% at 30 June
4
th
quarter distribution increased to 2.1875 cents
F I N A N C I A L S
Positive demographic trend, ageing population
+65yr cohort utilises4x healthcare services
Public infrastructure & funding under pressure
Operators exploring partnership funding model
Challenging dynamic in Australian health sector
NZ private health insurance participation higher
S T R A T E G Y & D R I V E R S
Highlights
FINANCIAL AND PORTFOLIO PERFORMANCE DELIVERING ON STRATEGY
Like-for-like rental growth of 2.1%
18.2 year WALE (+0.5 yrs), 99.3% occupancy
1.8% p.a. avg. lease expiry over next 10 years
NZ$112m development pipeline
Portfolio WACR firmed 36 bps to 5.76%
NZ$195mof acquisitions including five hospitals
P O R T F O L I OO U T L O OK
Strategic opportunity Healthscope real estate
Increased FY2019 cash distribution by 2.2% to 8.75 cpu
Maintain low risk portfolio profile & metrics
Execution of brownfield pipeline at attractive yield on cost
Widen & strengthen operating partner relationships
Focus on long-term value creation
(1)Comparative period results adjusted for $13.8m one-off lease termination receipt in October 2016
(2)Calculated in accordance with the Vital’s Trust Deed
Note: Refer to glossary for explanation of abbreviated terms
4

Strategy

Strategy
LONG TERM INVESTMENT IN AUSTRALASIA’S HEALTHCARE INFRASTRUCTURE
6

Strategic Drivers
CORE COMPONENTS DRIVING EXECUTION TO STRATEGY
7

Total Returns
Source: Bloomberg, Craigs Investment Partners. Total returns (capital gain plus income) as at 30 June 2018
Compound annual return1yr3yr5yr7yr10yr
VHP-7.5%11.7%13.3%13.8%13.6%
S&P/NZX All Real Estate Gross8.9%8.7%10.6%11.4%8.9%
S&P/NZX 50 Index Gross17.5%16.0%15.0%14.6%10.8%
S&P/ASX 200 AREIT13.0%9.7%11.9%13.5%6.0%
VITAL HAS OUTPERFORMED LOCAL INDICIES ON A COMPOUND BASIS OVER THE LAST DECADE
8

NTA growth....
A STRONG HISTORIC INDICATOR OF UNIT PRICE PERFORMANCE
Unit price performance relative to NTA per unit
Unit price premium / (discount) to NTA at 30 June
NTA growth has been driven by a
combination of property revaluations and
foreign exchange.
NTA historically underpinned unit price
performance
Trading at a discount to NTA for the first
time in 7 years.
Current trading price equates to an
implied portfolio capitalization rate of
6.0%.
9

Distribution Sustainability
MAINTAINING PRUDENT & CONSERVATIVE PAYOUT RATIO
Sources: Macquarie Securities and FNZC
Notes:
NZ listed property sector 5 year compounded annual growth rate of distribution is a weighted average of NZX listed property companies by market capitalization
Vital’s calculation of adjusted funds from operations may differ from comparative entities
AFFO payoutratio
5 Year Compounded Annual Growth Rate of Distribution
Industry leading payout ratio, average of
73% over last four years versus the current
NZ listed property vehicle average of
101%.
AFFO adjusts for non-cash charges, non-
recurring items, manager’s incentive fee,
leasing incentives and maintenance capital
expenditures
Scale & diversification strategy driving
distribution outperformance relative to NZ
Listed Property sector
Quarterly distribution increased to 2.1875
cents per unit for the fourth quarter of
FY2018.
Equates to an annual distribution of 8.5625
cents per unit in FY2018 and guidance of
8.75 cents per unit for FY2019
Implied distribution growth of 2.2% next
year.
10

Healthscope (HSO) real estate opportunity
SITUATION UPDATE
STRONG ALIGNMENT TO
LONG TERM STRATEGY
TACTICAL DECISION TO
INVEST
BENEFITS OF A 10%
STAKE
Interest in HSO underlying
real estate is (and has
always been) of significant
strategic interest
Jointly secured a 10%
interest in HSO with
NorthWest, Vital’s Manager
and major unitholder
Clear market statement of
intent, maximize influence,
flexibility to work alongside
HSO or other potential
bidders
11
HSO POSITION
PRUDENT &
PROPORTIONATE
NEXT STEPS...
22 May 2018 stated “it will
undertake a strategic review
of its hospital property
portfolio”
Costs and benefits are
shared, exposure managed
through caps and collars.
Vital to benefit from HSO
dividend income
Monitor situation, develop
strategic and tactical plan
to execute at appropriate
time

Governance update
THIRD INDEPENDENT DIRECTOR TO BE APPOINTED
GRAEME HORSLEY
RETIREMENT AS
INDEPENDENT CHAIR
REVISED POLICY
DOCUMENTS
THIRD INDEPENDENT
DIRECTOR TO BE
APPOINTED
Claire Higgins appointed
independent Chair and
David Carr (Vital CEO)
appointed Executive
Director on an interim basis
Review and update of
Conflicts Policy, SIPO and
Board Charter completed
Appointment prior to
annual meeting
12

Investment
activity

Investment Activity
SCALE & DIVERSIFICATION STRATEGY SUPPORTING DISTRIBUTION SUSTAINABILITY, AND CONSERVATIVE GROWTH
Vital has strategically
acquired properties
with expansion
potential adjacent to
existing properties
providing opportunities
to deploy incremental
capital into brownfield
developments at
attractive yields
Committed
development spend of
NZ$112m over the next
four years.
Additionally, underlying
indexation of rents on
core portfolio (and
acquisitions and
development) supports
earnings growth
14

Portfolio overview
$1.73B PORTFOLIO OF HEALTHCARE REAL ESTATE COMPRISING 42 INVESTMENT PROPERTIES AND ~2,600 BEDS
15

Acquisitions update
ACQUISITIONS MAINLY ‘OFF-MARKET’ WITH PARTNERS SEEKING TO MAINTAIN A RELATIONSHIP WITH VITAL
16
Total
Future
Asset
Purchase
Development
Type
Price
Potential
Settlement
The Hills Clinic (Sydney, NSW)
Psych
A$30.3

31-Jul-2017
Eden Rehabilitation Hospital (Cooroy, QLD)
Rehab
A$23.8

11-Dec-2017
Land held for development (FY2018)
Strategic
A$7.5

Various
Total Australian Acquisitions
A$61.5
Wakefield Hospital (Wellington, NZ)
Acute
NZ$23.7

14-Dec-2017
Royston Hospital (Hastings, NZ)
Acute
NZ$54.2

14-Dec-2017
Bowen Hospital (Wellington, NZ)
Acute
NZ$44.5

14-Dec-2017
Land held for development (FY2018)
Strategic
NZ$2.1

3-Aug-2017
Total New Zealand Acquisitions
NZ$124.5
Total Acquisitions in NZD
NZ$194.7

Committed development update
BROWNFIELDS DRIVING VALUE-ADD OUTCOMES, UNDERPINS EARNINGS SUSTAINABILITY, IMPROVES ASSET QUALITY & PERFORMANCE
Decision was made in conjunction with operator to base isolate Wakefield development
and to provision shell space for future expansion
Bowen Hospital development was redesigned to use part of the existing infrastructure
17

Sector drivers
& trends

Sector drivers and trends
PERIODIC REGULATORY REFORM, LONG TERM TRENDS UNDENIABLE
E C O N O M I C & M A R K E T I N F L U E N C E S
REGULATORY
PUBLIC SYSTEM
PRESSURE
RELATIVELY
INSULATED
reform relatively constant,
diversification critical
private system
critical component
from macro financial,
economic and market
conditions
S T R O N G F O R E C A S T D E M A N D, U N D E N I A B L E T R E N D S
2x
~4x
80%
>65 year demographic
forecast over the next
40 years
>65 year demographic
have at least
one chronic disease
utilisationof
healthcare services
by >65 year demographic
19

Financials

Financial performance
CORE BUSINESS AND STRATEGIC FOCUS DELIVERING RESULTS
* Adjusted for $13.8m one-off lease termination receipt received in October 2016
Gross rental income increased 20% due to contribution from ~$480m of acquisition and
development activity over the last 24 months.
Other expenses includes $3.6m of strategic transactional costs related to the initiation of
the Healthscope opportunity, a ~$3.8m increase in the Manager’s base fee on higher AUM
and a ~$0.8m increase in the Manager’s incentive fee.
Net finance expenses increased on higher drawdown of bank facility to fund investment
activity and higher funding costs on floating rate debt.
Property revaluations and other income includes $85.5m of fair value gains offset by
$4.6m of derivative fair value losses and unrealisedforeign exchange losses.
21
ActualNormalisedChangeChange
FY2018FY2017*$m%
Gross rental income93,678 78,032 15,646 20.1%
Net rental income90,65975,84014,818 19.5%
Other income and expenses(31,296)(22,070)(9,226) 41.8%
Net finance expenses(22,787)(14,554)(8,233) 56.6%
Operating profit before tax and other income36,576 39,217 (2,641)(6.7%)
Property revaluations and other income80,861178,115 (97,254)(54.6%)
Profit before income tax117,437217,332(99,895)(46.0%)
(in 000s of $NZ, except per unit amounts)

Net distributable income
CONSERVATIVE NET DISTRIBUTABLE INCOME PAYOUT
* Adjusted for $13.8m one-off lease termination receipt received in October 2016
(1) Available at http://www.vhpt.co.nz/our-structure
Net distributable income was down slightly due to the aforementioned strategic
transactional costs partially offset by higher net rental income versus the prior year
Calculation of net distributable income adds back the Manager’s incentive fee expense
in accordance with Vital’s Trust Deed
1
22
Actual
Normalised
Change
Change
FY2018
FY2017*
$m
%
Profit before income tax
117,437
217,332
(99,895)
(46.0%)
(Deduct) / Add:
Property revaluations and other income
(80,861)
(178,115)
n.a.
n.a.
Manager's incentive fee
13,096
12,314
782
6.3%
Gross distributable income
49,672
51,532
(1,860)
(3.6%)
Income tax expense (current)
(3,537)
(3,526)
(11)
0.3%
Effective tax rate
7.1%
6.8%
Net distributable income
46,135
48,006
(1,871)
(3.9%)
Net distributable income per unit (earned) (cpu)
10.62c
11.40c
(0.78c)
(6.8%)
Distribution per unit (cpu)
8.56c
8.50c
0.06c
0.7%
Net distributable income payout ratio
81%
75%
Units on issue (weighted average, millions)
434,322
421,117
(in 000s of $NZ, except per unit amounts)

Adjusted funds from operations
CONSERVATIVE PAYOUT RATIOS
* Adjusted for $13.8m one-off lease termination receipt received in October 2016
23
ActualNormalisedChangeChange
FY2018FY2017*$m%
Profit before income tax
117,437217,332(99,894)(46.0%)
Revaluation (gains)/losses
(85,461)(168,549)83,088(49.3%)
Unrealised FX (gains)/losses
1,717(543)2,260(416.2%)
Derivative fair value adjustment (gains)/losses
2,883(9,023)11,906(132.0%)
Manager's incentive fee
13,09612,314782 6.3%
Gross distributable income
49,67251,531(1,859)(3.6%)
Current tax
(3,537)(3,526)(11) 0.3%
Net distributable income46,135 48,004 (1,870)(3.9%)
Amortisation of deferred financing charges
46838582 21.3%
Amortisation of leasing costs & tenant inducements
862928(67)(7.2%)
Funds from operations (FFO)
47,46449,318(1,854)(3.8%)
Strategic transactional costs
3,579- 3,579n.a.
Actual capex & leasing from continuing operations
(1,554)(1,973)419(21.2%)
Adjusted funds from operations (AFFO)49,489 47,345 2,144 4.5%
AFFO (cpu)11.39c11.24c0.15c 1.4%
AFFO payout ratio75%76%
(in 000s of $NZ, except per unit amounts)

Gross rental income
EXCLUDING ONE-OFF ITEMS, ACQUISITIONS, DEVELOPMENTS AND RENT REVIEWS WERE KEY DRIVERS OF GROWTH
Rental income bridge
Acquired ~$420m of property
in the last 24 months at a
weighted average yield of
~6.0%
Invested ~$60m in
developments over last 24
months at a weighted average
yield of ~7.6%
Rent reviews completed at
annualisedrate of 2.3% in
FY2018 and 1.9% in FY2017
(see rent review slide for
further details)
(NZ 000’s)
24

Like for like operating results
STRONG REVENUE GROWTH DRIVING POSITIVE CORE PORTFOLIO PEFORMANCE
Note:
Revenue includes passing rent and expense recoveries as agreed to under the terms of respective leases
In the like for like portfolio:
•Revenue increased 2.1% (0.2%
on a same currency basis)
•Impacted by NZ$1.7m rental
reversion at Allamanda
versus the prior year
•Expenses increased 12.2%
(10.7% on same currency basis)
•Net operating income
increased 0.4% (decreased 1.6%
on a same currency basis)
Comparative like-for-like performance
25
* Adjusted for $13.8m one-off lease termination receipt received in October 2016
Geography
(in 000s of NZ$)
FY2018
Variance
Change
Revenue
78,356
76,720
1,636
2.1%
Expenses
(9,845)
(8,779)
(1,067)
12.2%
Non-recurring R&M
290
585
(295)
(50.4%)
Like-for-like net operating income
68,801
68,526
275
0.4%
Non-recurring R&M
(290)
(585)
Acquisitions
18,823
6,192
Developments
3,325
1,707
Total net operating income
90,659
75,840
Normalized
FY2017*

Balance sheet
PRUDENT CAPITAL POSITION, WELL PLACED FOR 2019
Gearing remains
within bank and Trust
Deed covenants
NTA per unit growth
driven by revaluation
and foreign exchange
gains.
NTA per unit bridge
26
Actual
Actual
change
change
(in 000s of $NZ, except per unit amounts)
FY18
FY17
$
%
Investment properties
1,731,247
1,376,243
355,004
25.8%
Bank debt drawn
670,124
402,649
267,475
66.4%
LVR (bank covenant)
38.7%
29.3%
945 bps
Unitholder funds
987,976
879,821
108,155
12.3%
Units on issue (m)
436,893
428,562
8,331
1.9%
Net Tangible Assets
2.26
2.05
0.21
10.2%
Period end NZD/AUD exchange rate
0.9159
0.9525

1,376.2
194.7
29.3
85.5
45.5
1,731.2
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
FY2017
Acquisitions
Capital
additions
Property
revaluations
Foreign
exchange
FY2018
NZ
portfolio
in NZ$
Australian
portfolio
in A$
A $1,057.7m
NZ$265.7m
A $1,215.5m
NZ$404.1m
Investment property
ACQUISITIONS AND REVALUATIONS KEY DRIVERS OF GROWTH
Investment property bridge
Acquisitions: Purchased
The Hills Clinic (A$32.3m),
Eden Rehabilitation (A$25.3m),
Wakefield, Bowen, Royston
(NZ$122m), and
Strategic land (NZ$9.7m)
Capital additions: Spent $25.5m on
active developments, $2.2m on net
tenant incentives and $1.6m on
maintenance capital expenditures
Fair Value: Portfolio cap rate
compressed 36bps (see valuation
section for further details)
Foreign Exchange:Period end
NZD/AUD exchange rate decreased
to 0.9159 from (0.9525 in the prior
year).
(NZ 000’s)
All figures in NZD unless otherwise noted
27

Capital
management

Debt maturity
UTILISING THE AVAILABLE HEADROOM AND ADDING CAPACITY
Renewed two tranches of existing
bank facility in June 2018
Tranche A of A$125m
extended to March 2021.
Tranche B of A$200
expanded (A$100m
previously) and extended to
July 2022.
Weighted average debt maturity
now at 3.1 years
Bank Facilities30 Jun 201830 Jun 2017
LVR (Trustcovenant)37.5%28.9%
LVR(Bank covenant)38.7%29.3%
Duration3.1 years2.5 years
Headroom available$114m$64m
Debt maturity schedule
29

Hedging profile
STRONG FINANCIAL POSITION, FLEXIBILITY FOR THE RIGHT ACQUISITION AND DEVELOPMENT OPPORTUNITIES
Rates
30 Jun
2018
31 Dec
2017
30 Jun
2017
Weightedaverage cost of total debt4.60%4.09%4.34%
Weightedaverage fixed rate (exc’lline and margin)3.21%3.40%3.37%
Weightedaverage fixed rate duration7.0 years5.8 years6.0 years
% of drawn debt fixed80%52%80%
* Fixed rates exclude line fees and margin
Hedging profile
30

Portfolio

NSW
33%
NZ
23%
VIC
19%
QLD
13%
WA
6%
SA
4%
TAS
1%
Acute
Surgical
55%
Mental health
14%
Medical office
buildings
12%
Rehabilitation
13%
Aged care
4%
Strategic
2%
Portfolio composition
PORTFOLIO DIVERSIFIED ACROSS GEOGRAPHY AND HEALTH CARE SUB-SECTORS
Geographic Diversification
Sector Diversification
Top Ten Tenants
Tenant
% of
revenueLocations
1HealtheCare49%18
2Epworth Foundation10%3
3AcurityGroup7%3
4Hall& Prior5%5
5Sportsmed4%3
6Mercy Ascot4%2
7Ramsay Health Care2%1
8Ormiston Surgical2%1
9Castlereagh Imaging1%1
10Kensington Hospital1%1
Total85%38
32
* Top Ten Tenants based on revenue earned in the last 6 months

Core portfolio metrics
5 YEAR TRENDS SHOW PORTFOLIO IN GREAT SHAPE -UNDERPINS LONG-TERM PERFORMANCE
33

1.8% p.a.
average lease
expiry over the
next 10 years
Lease expiry profile
Lease expiry
LOW RISK EXPIRY PROFILE SUPPORTS SUSTAINABLE, PREDICTABLE AND DEFENSIVE CASH FLOWS
Lease expiries in FY2019 and FY2020 primarily reflect smaller tenancies at multi-tenant properties,
with a high expectation of renewal, including:
Ascot Hospital, Ascot Central, Ormiston Hospital, Epworth Eastern Medical Centre, Gold Coast
Surgery, and EkeraMedical Centre.
In terms of the largest single lease expiries over the next 5 years, the current estimated probability
of renewal is over 75%.
34

Previous Rent
New Rent
Annualised
Increase
Annualised
Growth
FY2018
Growth
($000s)
#
(NZD)
(NZD)
(NZD)
(local F/X)
(local F/X)
Australia
64
55,338
59,086
3,748
2.3%
0.7%
New Zealand
43
10,579
10,814
235
2.2%
1.6%
Pending
13
4,621
TBD
TBD
TBD
TBD
Total
120
70,538
69,899
3,983
2.3%
0.8%
Previous Rent
New Rent
Annualised
Increase
Annualised
Growth
FY2018
Growth
($000s)
#
(NZD)
(NZD)
(NZD)
(local F/X)
(local F/X)
C PI
84
60,935
64,539
3,604
2.1%
0.8%
Fixed
15
4,314
4,634
320
3.0%
1.4%
Market
8
668
726
58
8.7%
3.5%
Pending
13
4,621
TBD
TBD
TBD
TBD
Total
120
70,538
69,899
3,983
2.3%
0.8%
Rent Reviews
HIGH PERCENTAGE OF TOTAL RENT IS REVIEWED ANNUALLY WITH CPI OR STRUCTURED REVIEW MECHANISMS
Reviews by Geography
Rent reviews were completed on 81% of leases in the portfolio as at 1
st
July 2017.
Based on independent year-end valuations, the portfolio is approximately 1% under-
rented.
Reviews by Type
35
* Pending expiries refers to those leases that fell due during the year where new rents have not been settled.

Property
revaluations

Annual revaluation summary
VITAL HAS MARKET LEADING PORTFOLIO CHARACTERISTICS WITH EMBEDDED VALUE-ADD POTENTIAL
Revaluation summary
Independent valuations undertaken by 6 firms, no property valued twice consecutively in two financial years
Revaluation gain of $85.5m or 6.4%
90% of gain from Australian portfolio, 10% from New Zealand
Portfolio WACR firmed 36 bps to 5.76% (Australia firmed 39 bps to 5.73%, New Zealand firmed 29 bps to 5.83%)
Metropolitan assets WACR 5.57%, regional assets WACR 5.80%
Drivers
Speed of cap rate firming across the market, appears to be moderating
Continued demand for healthcare real estate, new entrants, growing competition & capital allocation to the sector
88% of valuation growth driven by cap rate compression, 9% market rent growth, and 3% development margin
Increased transactional activity providing market evidence of ongoing sector maturity
Relatively low interest rate environment
Consistent rent growth and ongoing rental affordability a supporting factor
Unique and attractive lease terms
37

Independent Portfolio Revaluations
STRONG DEMAND FOR HEALTHCARE INFRASTRUCTURE A CORE DRIVER OF CAP RATE COMPRESSION
All data as at 30 June.
Capitalisationrates are reflective of the income producing portfolio and exclude properties held for development
38

Analysis of cap rate movement
LACK OF MATERIAL DIFFERENTIATION IN CAP RATE MOVEMENTS REFLECTS SECTOR SUPPLY / DEMAND IMBALANCE
Cap rate movement by asset type
Portfolio geographic diversification by value
Portfolio asset type by value
Cap rate movement by metro / regional location
39
Actual
Actual
Variance
30-Jun-18
30-Jun-17
(bps)
Acute
5.69%
5.97%
-29
Aged Care
7.19%
7.61%
-42
MOB
6.17%
6.46%
-30
Psychiatric
5.42%
6.00%
-58
Rehabiliation
5.64%
6.02%
-37
Average Portfolio
5.76%
6.12%
-36
Cap rate
Cap rate
Variance
30-Jun-18
30-Jun-17
(bps)
Metro
Australia
5.52%
5.91%
-39
New Zealand
5.68%
6.00%
-32
Average Metro
5.57%
5.93%
-36
Regional
Australia
5.71%
6.22%
-51
New Zealand
7.06%
6.71%
36
Average Regional
5.80%
6.26%
-46
Average Portfolio
5.76%
6.12%
-36

Australian real estate sector cap rates
SUSTAINABLE, PREDICTABLE AND DEFENSIVE CASH FLOWS ARE UNIQUE INVESTMENT QUALITIES DRIVING DEMAND.
Structural cap rate shift over previous 24 months highlighted by ~150 bps firming
in Healthcare capitalisationrates vs ~80 bps for All Property;
31 December 2017 ~80 bps spread between Healthcare and All Property
capitalisationrates
Source: MSCI Inc.
Capitalisation
Rate
40

2019 Focus

2019 Focus
Continued proactive asset management to support operating and financial results
Execute brownfield pipeline, assess and generate additional value-add opportunities
Prudent capital management, assess and utiliseall the ‘tools in the toolkit’ as required
Leveragetrackrecordofdelivery,performanceandglobalexpertise
Strategic approach to opportunities, including Healthscope
Continue to position Vital to execute on long-term unitholder value creation
Deliver and maintain sustainable distribution of 8.75 cpu
Enhance existing relationships, foster and expand on new strategic partnerships
42

Disclaimer
This presentation has been prepared by Vital Healthcare Management Limited (the
"Manager") as manager of the Vital Healthcare Property Trust (the "Trust"). The details
in this presentation provide general information only. It is not intended as investment
or financial advice and must not be relied on as such. You should obtain independent
professional advice prior to making any decision relating to your investment or
financial needs.
The provision of this presentation does not constitute an offer, invitation or
recommendation to subscribe for or purchase units in the Trust.
Past performance is no indication of future performance.
No money is currently being sought, and no applications for units will be accepted, or
money received, unless the unitholders have received an investment statement and a
registered prospectus from the Trust.
9
TH
August 2018
43

Glossary
44

---

About Vital Healthcare Property Trust
Vital Healthcare Property Trust (NZX: VHP) is Australasia’s largest listed investor in healthcare real estate. Tenants include hospital
operators and healthcare practitioners who deliver a wide range of medical and healthcare related services. The Manager of Vital
Healthcare Property Trust is NorthWest Healthcare Properties Management Limited.
vhpt.co.nz

9 August 2018

Vital delivers solid result and increases unitholder
distributions by 2.2%
Vital Healthcare Property Trust (Vital) today announced its audited 2018 full year results,
with a reported net profit after tax of $100.1m. Vital will increase its annualised cash
distribution to unitholders to 8.75 cents per unit from the fourth quarter distribution of the
2018 financial year.
Highlights
 Gross rental income of $93.7m, up 20.1%
1
;
 Net distributable income of 10.6 cpu;
 Cash distribution of 8.5625 cpu, payout ratio of 81%;
 Cash earnings (or AFFO
2
) of $49.5m, up 4.5%
1
;
 Successful bank facility renewal and extension by A$100m;
 LVR at 37.5%;
 Vital’s portfolio valued at $1.73bn;
 Portfolio WACR firmed 36bps to 5.76%, from 6.12%;
 NTA increase to $2.26 from $2.05, up 10.2%;
 99.3% occupancy, maintained at over 99% for the ninth consecutive year;
 WALE of 18.2 years, up from 17.7 years;
 $194.7m of acquisitions across Australasia, including 5 hospitals, all with brownfield potential;
 Invested $27.7m on brownfield projects, $112m to be completed at average yields of ~7%;
 Integration of the NorthWest Healthcare Australia management team, resulting in 30 professionals in
Auckland and Melbourne;
 Jointly
3
secured an interest in ASX-listed Healthscope, Australia’s second largest private hospital operator,
providing a tactical and generational opportunity to acquire a quality hospital real estate portfolio.
Claire Higgins, Chair of the Board of the Manager said “We continue to build on Vital’s market leading position,
which underpins our strategy to drive long term value-add opportunities and deliver sustainable returns to
investors. With this backdrop and reflecting Vital’s overall position and relatively stable outlook, the Board has
prudently determined to increase the annualised cash distribution to unitholders to 8.75 cpu effective from the
fourth quarter of the 2018 year”.
David Carr, the Chief Executive of the Manager said “Vital’s stable portfolio and financial position has again
delivered solid overall results. The healthcare real estate sector continues to experience rising investor demand
driven by its unique defensive qualities and strong investment characteristics. Notwithstanding some industry

1 Adjusting for the 2017 one-off $13.8m lease termination receipt
2 Adjusted funds from operations
3
As announced on 8 May. Interest is with Vital’s Manager and major unitholder, NorthWest Healthcare Properties REIT

vhpt.co.nz
headwinds in Australia and moderate tailwinds in New Zealand, the undeniable trends of a growing and ageing
population continue to support our positive long term outlook”.
Financial performance
Gross rental income exceeded the prior year by $1.8m or 2.0% in which it needs to be noted that the 2017
comparative included a $13.8m lease termination receipt. This revenue growth was a result of contributions from
development income and acquisitions over the period. After property expenses, net income grew $1.0m or 1.1%
for the year.
Finance expenses increased from the prior year by $8.5m reflecting the increase in the level of debt funding over
the period and increasing interest costs on renewed bank facilities. Vital acquired investment properties during
2018 totalling $194.7m, including five private hospitals.
Other expenses were up driven primarily by management fees of $11.9m and incentive fees of $13.1m as a result
of revaluation gains. The incentive fee is calculated in accordance with the Trust Deed and based on the average
growth in the value of the Trust’s assets over book value for the last three years. The incentive fee is payable by
Vital issuing units to the Manager. Vital’s Manager has confirmed that the 2018 issuance of units pursuant to the
incentive fee will be managed so as not to breach Vital’s PIE status. Other expenses also includes $3.6m of
strategic transaction costs which represents the contribution Vital has made towards costs in acquiring an interest
in ASX-listed Healthscope.
Net distributable income (NDI) for the year was $46.1m (-25.4%) equating to 10.62 cpu and a 27.6% decrease on
the prior year. The 2017 NDI included the benefit of a one-off lease termination receipt and associated tax
expense which if adjusted would provide a more comparable 11.4 cpu. When determining Vital’s cash earnings
(or AFFO), adjustments are usually made for maintenance capital expenditure and lease incentives, and would
have been broadly in line with net distributable income on a cents per unit basis. Under AFFO methodology there
would also be an adjustment to add back the strategic transaction costs resulting in a higher AFFO position of
11.57 cpu.
The 2018 full year distribution of 8.5625 cpu reflects a prudent 81% NDI payout ratio on an adjusted basis.

NTA growth to $2.26
Allowing for the 2018 revaluation gains of $85.5m and the benefit of foreign exchange movements of $45.5m,
Vital’s NTA increased to $2.26, an increase of 10.2% on the prior year NTA of $2.05. The current NTA reflects a
large diversified portfolio of high quality healthcare real estate with attractive long term characteristics.
Revaluations summary
Capitalisation rate firming equated to approximately 90% of the overall revaluation increase, with the balance of
the gains driven by market rent growth and development margins.
Albeit the rate of firming of capitalisation rates has moderated from previous years, they remained a core driver of
the independent valuation outcome. Specifically, Vital’s weighted average capitalisation rate firmed by 36bps to
5.76% and Vital’s portfolio value increased to $1.73bn at 30 June 2018.
The ongoing firming of capitalisation rates have also been driven by Vital’s unique property characteristics,
sustained portfolio performance, and continued strong demand from investors.

Treasury and capital management
On 6 June 2018 Vital announced that it had extended and expanded its existing bank facility adding A$100m of
additional capacity. Two existing tranches that were due to expire on 31 March 2019 were renewed, with Tranche
A, representing A$125m, extended to March 2021 and Tranche B expanded to A$200m (from A$100m previously)
and extended to July 2022.
Following the refinancing activity Vital’s weighted average debt maturity increased by 1.1 years to 3.1 years.
Vital’s LVR as at 30 June 2018 as determined under the Trust Deed was 37.5% (2017: 28.9%) and remains well
below the Trust Deed covenant of 50%. Under the terms of the bank facility the LVR as at 30 June 2018 was 38.7%
which is below the facility covenant of 50%, with the higher level reflecting that a related party advance of A$40.0m
does not form part of the banks security.
Vital’s weighted average cost of debt was 4.60% as at 30 June 2018 (2017: 4.34%) and includes bank line and
margin fees.
At year end Vital had a hedged interest rate position of 79.8% (2017: 79.5%). Movement in market interest rates
over the period saw the unrealised marked-to-market valuation on those interest rate swaps increase by $3m.

vhpt.co.nz
Market leading portfolio metrics
The management team remain focused on ensuring that Vital’s core portfolio metrics remain strong, with the ninth
consecutive year of occupancy above 99% (99.3% at year-end). Additionally Vital’s WALE of 18.2 years was up
from 12 months prior (17.7 years), and remains by far the longest WALE of any Australian or New Zealand listed
REIT.
A total of 107 rent reviews were completed (approximately 81% of passing rent at 1 July 2017) in the year
resulting in rental growth of 2.3% (excluding the impact of foreign exchange) of which 93% were structured
reviews. Similarly, approximately 86% of total rent is subject to review through the 2019 financial year, with 98% of
this income subject to structured or CPI based reviews.

Of the 1.7% of income forecast to expire in 2018, 60% was renewed pre 30 June, with the majority of the balance
renewed post balance date.

Looking out to the future, just 3.9% of leases (by income) expire in FY2019, in which we have confidence in our
ability to renew these tenants on the same or better terms. Over the next 10 years Vital’s average annual lease
expiry sits at 1.8%, which provides long term earnings visibility.

Acquisitions and development
Acquisitions during the year totalled $194.7m, including five private hospitals. Vital has diversified its portfolio
investing further into the New Zealand market with the Acurity portfolio acquisition and the settlement of two
private hospitals in Queensland and New South Wales. All these hospital acquisitions have short to medium term
brownfield development projects planned or underway.
Recognising forecast ongoing healthcare demand, Vital has continued to invest in acquisitions adjacent to our
existing facilities to protect and enhance long term value. Vital made four of these strategic acquisitions totalling
A$9.6m in 2018 and expects to continue with this investment philosophy to support the long term growth of our
partners and the underlying assets.
Vital’s value-add development programme in Australia continues with projects currently underway at two hospitals
(North West and Lingard) with A$8.6m to be spent prior to the end of calendar 2018.
We are currently in the final stages of design at Wakefield (Wellington) and Royston (Hastings) Hospitals which
were acquired in December 2017. A small NZ$4.0m development has commenced at Bowen Hospital (Wellington)
which will establish Wellington’s first Radiation Oncology Centre. The project is forecast to be completed by
January 2019.
The brownfield development programme remains central to Vital’s strategy. Currently contracted forecast
rentalised development yields of approximately 7% provide an attractive spread to Vital’s current WACR of 5.76%.
Brownfield development continues to clearly underpin earnings sustainability, improve asset quality and enhance
long-term value.

Cash distribution increased to 8.75 cpu from fourth quarter 2018
For the fourth quarter of the 2018 financial year, the Board has confirmed that investors will receive an increased
distribution of 2.1875 cpu, up from the previous quarter of 2.125 cpu with no imputation credits attached. That
increases the 2018 full year distribution to 8.5625 cpu, ahead of the 8.5 cpu guided. The record date for the
distribution is 6 September 2018 and payment will be made on 20 September 2018.
Vital’s Distribution Reinvestment Plan will remain available to investors for this distribution with a 1.0% discount
being applied when determining the strike price.
The Board has also confirmed that the 2019 financial year cash distribution will be increased to 8.75 cpu.
This is a 2.2% increase on the prior year’s distribution and reflects the Board’s confidence in Vital’s overall position
and outlook. It is also consistent with its historically conservative payout ratio and sustainable distribution
message to unitholders. Over the last 5 years Vital’s cash distribution has prudently increased from 7.90 cpu to
8.75 cpu, equating to a compounded annual growth rate of 1.6% versus 1.4% for the New Zealand Listed Property
Sector.

Governance update
As advised to the market on 4 April 2018, the interim governance arrangements following the retirement of Mr
Graeme Horsley would be reviewed ahead of the 2018 Annual Meeting.
NorthWest Healthcare Properties Management Limited, the Manager of Vital Healthcare Property Trust has
confirmed that a third Independent Director will be appointed to the Board of the Manager prior to the 2018 Annual
Meeting.

vhpt.co.nz
The Board of the Manager has also completed a review of the Board Charter, Statement of Investment Policy and
Objectives (SIPO) and Conflicts Policy. These changes do not require unitholder approval, but have the
unanimous support of the Board of the Manager. The Conflicts of Interest Policy was also amended to include full
Board representation and equal voting rights by independent and non-independent directors. Updated versions of
the documents are available from 9 August on Vital’s website, www.vhpt.co.nz.

Outlook
Mr Carr said “We start 2019 with Vital’s portfolio and financial position ready to withstand short term headwinds,
particularly in Australia for hospital operators, balanced by a relatively positive outlook in New Zealand.
Vital’s investment thesis is backed by underlying long term trends. We continue to see, and believe, in the strong
demographic and technological trends driving demand for healthcare services – especially those delivered from
quality healthcare infrastructure and by market leading operators, like those in Vital’s portfolio.
With the management platform consisting of approximately 30 professionals in Auckland and Melbourne, this
enhanced team will drive the expansion of key industry relationships. We have further solidified our portfolio
management capability, continuing to drive outcomes like those reflected over many years of strong portfolio
performance.
The interest in ASX-listed Healthscope jointly positions Vital and NorthWest with a tactical advantage in a
generational opportunity to jointly acquire a sizeable, quality portfolio of Australian private hospital real estate
assets concentrated in large metropolitan centres. The Board sees this opportunity to further invest in long term
healthcare infrastructure as aligning directly with Vital’s stated scale and diversification strategy and core
investment objectives of enhancing long term earnings and value growth for unitholders.
We continue to support the growth demands of our existing partners, which enables us to drive our operating,
portfolio and financial results, delivering sustainable distributions and creating long term value for investors” said
Mr Carr.
Vital’s management team will present these results via a live webcast from 11:30 am NZ time today. Please refer
to our market release dated 6 July 2018 for details or click here.


– ENDS -

ENQUIRIES
David Carr, Chief Executive Officer
NorthWest Healthcare Properties Management Ltd, Telephone 09 973 7301, Email dcarr@vhpt.co.nz

Stuart Harrison, Chief Financial Officer
NorthWest Healthcare Properties Management Ltd, Telephone 09 973 7302, Email sharrison@vhpt.co.nz

Jason Kepecs, Director, Investments & Investor Relations
NorthWest Healthcare Properties Management Ltd, Telephone 09 973 7303, Email jkepecs@vhpt.co.nz

---

Reporting Period12 months to 30 June 2018
Previous Reporting Period12 months to 30 June 2017
Amount
NZ$000s
Percentage
change
Revenue from ordinary activities
1.1%
Profit (loss) from ordinary activities after tax
attributable to security holder
-54.0%
Net profit (loss) attributable to security holders
100,065-54.0%
Interim/Final DividendAmount per
security
Imputed
amount per
security
NZ$0.021875NZ$0.00000
Record Date
Dividend Payment Date
Comments:Refer
announcement
90,659
100,065
VITAL HEALTHCARE PROPERTY TRUST
Results for announcement to the market
6 September 2018
20 September 2018

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
28FINANCIAL STATEMENTS
INVESTING IN
AUSTRALASIA'S
HEALTHCARE
INFRASTRUCTURE
FINANCIAL STATEMENTS2018

29
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2018
Note
2018
$000s
2017
$000s
Gross property income from rentals93,67891,849
Gross property income from expense recoveries10,2587,620
Property expenses(13,277)(9,812)
Net property income490,65989,657
Other income and expenses5(31,296)(22,070)
Finance income38596
Finance expense6(23,172)(14,650)
Operating profit36,57653,033
Other gains/(losses)
Revaluation gain on investment property1085,461168,549
Fair value gain/(loss) on foreign exchange derivatives(300)(342)
Fair value gain/(loss) on interest rate derivatives(2,883)9,023
Unrealised gain/(loss) on foreign exchange(1,417)885
80,861178,115
Profit before income tax117,437231,148
Taxation expense7(17,372)(13,526)
Profit for the year attributable to unitholders of the Trust100,065217,622
Other comprehensive income
Items that may be reclassified subsequently to profit and loss:
Movement in foreign currency translation reserve28,802(2,183)
Realised foreign exchange gain/(loss) on hedges1,4579,605
Current taxation (expense)/credit(408)(2,689)
Unrealised foreign exchange gain/(loss) on hedges(2,317)(6,549)
Deferred taxation (expense)/credit6491,834
Fair value gain/(loss) on net investment hedges(2,834)(267)
Deferred taxation (expense)/credit79475
Total other comprehensive income/(loss) after tax26,143(174)
Total comprehensive income after tax126,208217,448
Earnings per unit
Basic and diluted earnings per unit (cents)823.0451.68
The notes on pages 33 to 53 form part of and are to be read in conjunction with these financial statements.

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
30FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
Note
2018
$000s
2017
$000s
Non-current assets
Investment properties101,731,2471,376,243
Derivative financial instruments118561,499
Other non-current assets1343,984327
Total non-current assets1,776,0871,378,069
Current assets
Cash and cash equivalents95,3883,352
Trade and other receivables1,189367
Other current assets3,8017,886
Derivative financial instruments113632,554
Total current assets10,74114,159
Total assets1,786,8281,392,228
Unitholders' funds
Units on issue14556,878538,469
Reserves15,629(11,295)
Retained earnings415,469352,647
Total unitholders' funds987,976879,821
Non-current liabilities
Borrowings15668,712401,879
Income in advance-1,541
Derivative financial instruments1114,44412,142
Deferred tax1286,79671,719
Total non-current liabilities769,952487,281
Current liabilities
Trade and other payables1616,96511,537
Income in advance2,2812,407
Derivative financial instruments1146097
Taxation payable9,19411,085
Total current liabilities28,90025,126
Total liabilities798,852512,407
Total unitholders' funds and liabilities1,786,8281,392,228
For and on behalf of the Manager, NorthWest Healthcare Properties Management Limited
C Higgins, Chair
9 August 2018
B Crotty, Director
The notes on pages 33 to 53 form part of and are to be read in conjunction with these financial statements.

31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2018
Units on issue
$000s
Retained
earnings
$000s
Translation
of foreign
operations
$000s
Foreign
exchange
hedges
$000s
Share based
payments
$000s
Total
unitholders'
funds
$000s
For the year ended
30 June 2017
Balance at the start of the period369,220171,617(81,530)58,0956,317523,719
Changes in unitholders' funds169,249---(6,317)162,932
Manager's incentive fee----12,31412,314
Profit for the period-217,622---217,622
Distributions to unitholders-(36,592)---(36,592)
Other comprehensive income for
the period
Movement in foreign currency
translation reserve--(2,183)--(2,183)
Realised foreign exchange gains
on hedges---6,916-6,916
Unrealised foreign exchange
gains/
(losses) on hedges---(4,715)-(4,715)
Fair value gains on net investment
hedges---(192)-(192)
Balance at the end of the year538,469352,647(83,713)60,10412,314879,821
For the year ended
30 June 2018
Balance at the start of the period538,469352,647(83,713)60,10412,314879,821
Changes in unitholders' funds18,409---(12,314)6,095
Manager's incentive fee----13,09513,095
Profit for the period-100,065---100,065
Distributions to unitholders-(37,243)---(37,243)
Other comprehensive income for
the period
Movement in foreign currency
translation reserve--28,802--28,802
Realised foreign exchange gains
on hedges---1,049-1,049
Unrealised foreign exchange
gains/
(losses) on hedges---(1,668)-(1,668)
Fair value gains on net investment
hedges---(2,040)-(2,040)
Balance at the end of the year556,878415,469(54,911)57,44513,095987,976
The notes on pages 33 to 53 form part of and are to be read in conjunction with these financial statements.

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
32FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year eneded 30 June 2018
Note
30 June
2018
$000s
30 June
2017
$000s
Cash flows from operating activities
Property income91,90690,271
Recovery of property expenses9,8377,478
Interest received9084
Property expenses(13,143)(13,410)
Management and trustee fees(12,341)(8,438)
Interest paid(22,290)(14,072)
Tax paid(6,062)(4,995)
Other trust expenses(2,283)(2,407)
Net cash provided by/(used in) operating activities945,71454,511
Cash flows from investing activities
Receipts from foreign exchange derivatives3,26611,115
Capital additions on investment properties(26,886)(30,575)
Purchase of properties(187,694)(223,292)
Prepaid acquisition costs(5,038)(3,394)
Advances provided to related parties(43,295)-
Payments for foreign exchange derivatives(1,736)(445)
Net cash provided by/(used in) investing activities(261,383)(246,591)
Cash flows from financing activities
Debt drawdown249,910219,989
Issue of units (net of issue costs)-157,004
Repayment of debt-(163,843)
Loan issue costs(1,029)-
Costs associated with Distribution Reinvestment Plan(27)(31)
Distributions paid to unitholders(31,149)(30,665)
Net cash from/(used in) financing activities217,705182,454
Net increase/(decrease) in cash and cash equivalents2,036(9,626)
Effect of exchange rate changes on cash and cash equivalents-(2)
Cash and cash equivalents at the beginning of the period3,35212,980
Cash and cash equivalents at the end of the year5,3883,352
The notes on pages 33 to 53 form part of and are to be read in conjunction with these financial statements.

33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 REPORTING ENTITY
The reporting entity is Vital Healthcare Property Trust (“VHP” or
the “Trust”), a unit trust established under the Unit Trusts Act
1960 by a Trust Deed dated 11 February 1994 as subsequently
amended and replaced, domiciled in New Zealand. The Trust is
managed by NorthWest Healthcare Properties Management
Limited (the “Manager”) and the address of its registered office is
Level 16, AIG Building, 41 Shortland Street, Auckland.
The consolidated financial statements of VHP for the year ended
30 June 2018 comprise VHP and its subsidiaries (together
referred to as the “Group”). VHP is listed on the New Zealand
Stock Exchange (NZX) and is a FMC reporting entity for the
purpose of the Financial Markets Conduct Act 2013. The Trust’s
principal activity is the investment in high quality Health Sector
related properties.
These consolidated financial statements were approved by the
Board of Directors of the Manager on 9 August 2018.
2 BASIS OF PREPARATION
(a) Statement of compliance
These financial statements have been prepared in accordance
with Generally Accepted Accounting Practice in New Zealand (NZ
GAAP). The financial statements comply with New Zealand
equivalents to International Financial Reporting Standards (NZ
IFRS) and other applicable Financial Reporting Standards, as
appropriate for profit-oriented entities. The consolidated financial
statements comply with International Financial Reporting
Standards (IFRS).
(b) Basis of measurement
These financial statements have been prepared on the historical
cost basis except for derivative financial instruments and
investment properties which are measured at fair value.
(c) Functional and presentation currency
These financial statements are presented in New Zealand Dollars
($), which is the Trust’s functional and presentation currency. All
information has been rounded to the nearest thousand dollars
($000), unless stated otherwise.
(d) Critical accounting estimates and judgements
In the application of NZ IFRS, the Board and management are
required to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on experience and other factors that are
believed to be reasonable under the circumstances, the results of
which form the basis of making the judgements. Actual results
may differ from the estimates, judgements and assumptions
made by the Board and management.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future
periods affected. Judgements made by management in the
application of NZ IFRS that have significant effects on the
financial statements and estimates with a significant risk of a
material adjustment in the next financial year are disclosed
where applicable in the relevant notes to the financial
statements. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are
significant to the financial statements, are as follows:
Note 10 – valuation of investment properties
Note 12 – deferred tax (and taxation in Note 7)
3 SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of consolidation
The Group’s financial statements incorporate the financial
statements of the Trust and entities controlled by the Trust (its
subsidiaries) as set out in Note 18. Control is achieved where the
Trust has the power over the investees; is exposed, or has rights,
to variable returns from it’s involvement with the investees; and
has the ability to use its power to affect its returns. The results of
subsidiaries are included in the consolidated financial statements
from the effective date of acquisition or up to the effective date of
disposal, as appropriate. All significant intra-group transactions,
balances, income and expenses are eliminated on consolidation.
(b) Foreign currency transactions
The individual financial statements of each group entity are
presented in the currency of the primary economic environment
in which the entity operates (its functional currency). For the
purpose of the Group financial statements, the results and
financial position of each group entity are expressed in New
Zealand Dollars.
In preparing the financial statements of the individual entities,
transactions in currencies other than the entity’s functional
currency (foreign currencies) are recorded at the rates of
exchange prevailing at the dates of the transactions. At the end
of each reporting period monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of
exchange prevailing at that time.
Exchange differences are recognised in profit or loss in the period
in which they arise except for exchange differences on
transactions entered into in order to hedge certain foreign
currency risks (see below for hedge accounting policies).
(c) Foreign operations
For the purposes of presenting the Group financial statements,
the assets and liabilities of the Group’s foreign operations are
expressed in New Zealand Dollars using exchange rates
prevailing at the end of the reporting period. Income and expense
items are translated at the average exchange rates for the period.
Exchange differences arising, if any, are recognised in other
comprehensive income and accumulated as a separate
component of equity in the Group’s foreign currency translation
reserve.

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
34FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3 SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Goods and services tax
The statement of comprehensive income and statement of cash
flows have been prepared so that all components are stated
exclusive of goods and services tax (GST) to the extent that GST
is recoverable. All items in the statement of financial position are
stated exclusive of GST with the exception of receivables and
payables, which include GST invoiced. Cash flows are included in
the statement of cash flows on a net basis. The GST component
of cash flows arising from investing and financing, which is
recoverable from, or payable to, the taxation authority, is
classified as part of operating cash flows.
(e) Investment properties
Investment property is property held either to earn rental income
or for capital appreciation or both. Investment properties are
initially stated at cost, including any related transaction costs.
Subsequent expenditure is charged to the asset’s carrying
amount only when it is probable that future economic benefits
associated with the item will flow to the Trust and the cost of the
item can be measured reliably. All other repairs and maintenance
costs are charged to the statement of comprehensive income
during the financial period in which they are incurred. Initial direct
costs incurred in negotiating and arranging operating leases and
lease incentives granted are added to the carrying amount of the
leased asset.
After initial recognition, investment properties are stated at fair
value as determined every year by independent valuers, with any
change therein recognised in the statement of comprehensive
income. In accordance with the valuation policy of the Trust,
complete property valuations are carried out by independent
registered valuers having appropriately recognised professional
qualifications and experience in the location and category of
property being valued. The valuation policy stipulates that the
same valuer may not value a property for more than two
consecutive years. The fair values are based on market values
being the estimated amount that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. In the
absence of current prices in an active market, the valuations are
prepared using a discounted cash flow methodology based on the
estimated rental cash flows expected to be received from the
property adjusted by a discount rate that appropriately reflects
the risks inherent in the expected cash flows.
Investment properties are derecognised when they have been
disposed of and any gains or losses incurred on disposal, being
the difference between the carrying amount of the investment
property at the time of disposal and the proceeds on disposal, are
recognised in the statement of comprehensive income in the year
in which the disposal occurred.
(f) Development of investment properties
Investment property that is being redeveloped for continuing use
is measured at fair value and subsequent expenditure is
capitalised to the asset’s carrying amount only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. Borrowing costs are capitalised if they are directly
attributable to the development of a qualifying property.
Capitalisation of borrowing costs commences when the activities
to prepare the property are in progress and expenditure and
borrowing costs are being incurred. Capitalisation of borrowing
costs may continue until the assets are substantially ready for
their intended use.
(g) Financial instruments
(g.1) Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other
receivables, cash and cash equivalents, borrowings and trade and
other payables.
(g.2) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and call
deposits.
(g.3) Trade and other receivables
Trade and other receivables are recognised initially at fair value.
A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able
to collect all amounts due according to the original terms of the
receivables. The amount of the provision is the difference
between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective
interest rate.
(g.4) Trade and other payables
Trade and other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
(g.5) Bank borrowings
Interest-bearing bank loans are initially measured at fair value
net of transaction costs. Subsequent to initial recognition,
borrowings are measured at amortised cost with any difference
being recognised in the statement of comprehensive income over
the period of the borrowing using the effective interest rate
method. Accrued interest is classified separately under trade and
other payables.
(g.6.1) Derivative financial instruments
The Group uses derivative financial instruments such as interest
rate swaps and forward exchange contracts to reduce its
exposure to interest rate risk and foreign exchange risk.
Derivative financial instruments are initially recognised and
subsequently measured at fair value. Gains and losses arising
from changes in fair value of a derivative are recognised as they
arise in the profit and loss in the statement of comprehensive
income unless the derivative is a hedging instrument in a
qualifying hedge relationship, in which case the gains and losses
are recognised in other comprehensive income. Derivatives are
recognised on the date the contract is entered into.

35
3 SIGNIFICANT ACCOUNTING POLICIES (continued)
(g) Financial instruments (continued)
(g.6.2) Hedge accounting
The Group has entered into hedge relationships for hedges of net
investments in foreign operations. Hedge relationships are
formally documented at the inception of the hedge and this
documentation identifies the hedged item, hedging instrument,
risks that are being hedged, strategies for undertaking the hedge,
and the way effectiveness will be assessed.
In the hedge of a net investment in a foreign operation, the
portion of foreign exchange differences arising on the hedging
instrument determined to be an effective hedge is recognised
directly in other comprehensive income. Any ineffective portion is
recognised directly in the profit and loss in the statement of
comprehensive income. The Group uses derivative financial
instruments and non-derivative financial instruments as hedging
instruments of a net investment in a foreign operation. On
disposal of the foreign operation, the cumulative value of such
gains or losses recognised in other comprehensive income is
reclassified to the profit and loss in the statement of
comprehensive income.
(h) Recognition of income
Rental income from the investment properties held by the Group
is recognised in the statement of comprehensive income on a
straight line basis over the term of the lease. Lease incentives
provided in relation to letting the investment property are
amortised on a straight line basis over the non-cancellable
portion of the lease to which they relate, as a reduction of rental
income. Operating expenses attributable to tenants are offset by
recoveries from tenants. Operating expenses not attributable to
tenants are offset by rental income.
Dividend income from investments is recognised when the
Group’s right to receive payment has been established.
(i) Finance expense
Finance expense comprises interest payable on borrowings and
realised gains and losses on the interest rate hedging
instruments that are recognised in profit or loss. All borrowing
costs (other than borrowing costs attributable to property under
development) are recognised in the statement of comprehensive
income using the effective interest method.
(j) Taxation
(j.1) Income tax expense
Income tax expense represents the sum of the tax currently
payable and deferred tax. Income tax expense is recognised in
profit or loss in the statement of comprehensive income except
to the extent that it relates to items recognised directly in other
comprehensive income or equity, in which case the tax is
recognised in other comprehensive income or equity.
(j.2) Current tax
The tax currently payable is based on taxable profit for the
reporting period, using tax rates enacted or substantively enacted
at the reporting date in the countries where the Group operates.
Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is
subject to interpretation, and establishes provisions where
appropriate on the basis of amounts expected to be paid to the
tax authorities. Taxable profit differs from profit reported in the
statement of comprehensive income because it excludes items
that are never taxable or deductible.
(j.3) Deferred tax
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all
taxable temporary differences, and deferred tax assets are
generally recognised for all deductible temporary differences to
the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be
utilised.
Deferred tax is calculated at the tax rates that are expected to
apply in the period in which the liability is settled or the asset
realised, based on tax rates (and tax rules) that have been
enacted or substantively enacted by the end of the reporting
period.
(k) Items carried at fair value
The items which are carried at fair value include investment
property and derivative financial instruments. These items are
classified into the following levels in the fair value measurement
hierarchy:
Level 1 – quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2 – inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
Level 3 – inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
(l) Operating lease commitments
The Group has entered into commercial property leases on its
investment properties. The Group has determined that it retains
all significant risks and rewards of ownership of these properties
and has thus classified the leases as operating leases.
(m) Capital
(m.1) Units
Units are classified as equity. External costs, net of tax, directly
attributable to the issue of new units are deducted from
unitholders’ funds as permitted by the Trust Deed.
(m.2) Distributions
Distributions to the Group’s unitholders are recognised as a
liability in the Group’s financial statements in the period in which
the distributions are approved.

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
36FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3 SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Capital (continued)
(m.3) Share based payments
The Trust receives management services from the Manager and
pays the Manager an asset management fee and an incentive fee.
The management fee is recorded in the statement of
comprehensive income and is settled in cash. The incentive fee,
as set out in the Trust Deed, is settled in newly issued units. The
incentive fee arrangements are considered a share based
payment. The Trust recognises the incentive fee as the services
are provided. The incentive fee not yet settled as newly issued
units is reflected within the share based payment reserve until
such time as it has been settled.
(n) Statement of cash flows
The statement of cash flows is prepared on a GST exclusive
basis, which is consistent with the statement of comprehensive
income.
The following terms are used in the statement of cash flows:
Operating activities are the principal revenue producing
activities of the Group and other activities that are not investing
or financing activities.
Investing activities are the acquisition and disposal of long term
assets and other investments not included in cash equivalents.
Financing activities are activities that result in changes in the
size and composition of the contributed equity and borrowings of
the entity.
(o) Standards, interpretations and amendments to published
standards that are not yet effective
At the date of authorisation of these financial statements the
following relevant standards and interpretations were in issue
but not yet effective and have not been applied in preparing these
financial statements. These changes are not expected to have a
material impact on the financial statements but may affect
presentation and disclosure:
NZ IFRS 9 Financial Instruments (effective for accounting periods
beginning on or after 1 January 2018) introduces a new
classification and measurement regime for financial assets and
liabilities. Vital is partway through the implementation project for
this standard, but ultimately this will not have a material impact
on the business.
NZ IFRS 15 Revenue from Contracts with Customers (effective
for annual reporting periods beginning on or after 1 January
2018) provides revenue recognition criteria in relation to the
nature, amount and timing of revenue associated with contracts
from customers. Vital has asessed the effects of applying the
new standard on the consolidated financial statements and has
concluded that the standard does not have a material impact on
the timing of revenue recognition.
NZ IFRS 16 Leases (effective for annual reporting periods
beginning on or after 1 January 2019) eliminates the distinction
between the operating and finance leases for lessees and will
result in lessees bringing most leases onto their balance sheets,
with the exception of certain short term leases and leases of low
value assets. There are minimal changes from the current NZ IAS
17 requirements for lessors. Vital is currently assessing the
impact of this standard.
Other standards and interpretations in issue but not yet effective
are not expected to have an impact on the financial statements of
the Group in the period of initial application.
(p) Standards, interpretations and amendments adopted by
Vital Healthcare Property Trust
There were no new standards, amendments or interpretations
adopted in the current year that impacted the Group.
(q) Changes in accounting policy and presentation
All accounting policies have been applied on a basis consistent
with the prior years' financial statements.

37
4 SEGMENT INFORMATION
The principal business activity of the Trust and its subsidiaries is to invest in Health Sector related properties. NZ IFRS 8 requires
operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the
chief operating decision maker in order to allocate resources to the segments and to assess their performance.
The information reported to the Group’s chief operating decision maker is based on primarily one industry sector, investing in Health
Sector related properties. The Group operates in both Australia and New Zealand.
The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment.
Australia
$000s
New Zealand
$000s
Total
$000s
Segment profit/(loss) for the year ended 30 June 2018:
Net property income69,93520,72490,659
Other (expense)(14,170)(17,126)(31,296)
Net finance (expense)(13,274)(9,513)(22,787)
42,491(5,915)36,576
Fair value gain/(loss) on interest rate derivatives-(2,883)(2,883)
Revaluation gains on investment properties75,9449,51785,461
Other foreign exchange gains/(losses)(2)(1,715)(1,717)
Total segment profit before income tax118,433(996)117,437
Taxation (expense)(17,372)
Profit for the year100,065
Segment profit/(loss) for the year ended 30 June 2017:
Net property income73,95615,70189,657
Other (expense)(7,588)(14,482)(22,070)
Net finance (expense)(6,290)(8,264)(14,554)
60,078(7,045)53,033
Fair value gain/(loss) on interest rate derivatives-9,0239,023
Revaluation gains on investment properties143,43625,113168,549
Other foreign exchange gains/(losses)(3)546543
Total segment profit before income tax203,51127,637231,148
Taxation (expense)(13,526)
Profit for the period217,622
Net property income consists of revenue generated from external tenants less property operating expenditure. The Group has two
tenants with over 10% of gross property income from rentals totalling $52.4m, all in Australia (2017: two tenants totalling $47.4m).
There were no lease termination receipts included in net property income for the year ended 30 June 2018 (2017: $13.8m).
There were no inter-segment sales during the year (2017: nil).
Segment profit represents the profit earned by each segment including allocation of identifiable administration costs, finance costs,
revaluation gains/(losses) on investment properties, and gains/(losses) on disposal of investment properties. This is the measure
reported to the Board of Directors, who are the chief operating decision makers for the purposes of resource allocation and
assessment of segment performance.

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
38FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4 SEGMENT INFORMATION (continued)
Australia
$000s
New Zealand
$000s
Total
$000s
Segment assets at 30 June 2018:
Investment properties1,327,104404,1431,731,247
Other non-current assets43,95788344,840
Current assets4,9685,77310,741
Consolidated assets1,376,029410,7991,786,828
Segment assets at 30 June 2017:
Investment properties1,110,530265,7131,376,243
Other non-current assets2861,5401,826
Current assets4,8139,34614,159
Consolidated assets1,115,629276,5991,392,228
Segment liabilities at 30 June 2018:
Borrowings526,811141,901668,712
Other liabilities98,07532,065130,140
Consolidated liabilities624,886173,966798,852
Segment liabilities at 30 June 2017:
Borrowings270,855131,024401,879
Other liabilities77,90732,621110,528
Consolidated liabilities348,762163,645512,407
For the purposes of monitoring segment performance and allocating resources between segments:
– all assets are allocated to reportable segments, and
– all liabilities are allocated to reportable segments.
5 OTHER INCOME AND EXPENSES
2018
$000s
2017
$000s
Expenses
Auditor's remuneration:
Audit and review of financial statements143139
Manager's fees11,8568,073
Manager's incentive fee13,09612,314
Strategic transaction costs3,579-
Other operating income/expenses2,6221,544
Total other expenses31,29622,070
6 FINANCE EXPENSES
2018
$000s
2017
$000s
Expenses
Interest expense24,12414,952
Borrowing costs capitalised(952)(302)
Total finance expenses23,17214,650

39
7 TAXATION
2018
$000s
2017
$000s
Profit/(loss) before tax for the period117,437231,148
Taxation (charge)/credit - 28% on profit before income tax(32,882)(64,722)
Effect of different tax rates in foreign jurisdictions15,78626,475
Change in tax rate-17,201
Tax exempt income3,6876,941
Foreign tax credits2,3515,019
Tax charges on overseas investments(8,559)(5,337)
Over/(under) provided in prior periods1,26375
Other adjustments982822
Taxation (expense)/credit(17,372)(13,526)
The taxation (charge)/credit is made up as follows:
Current taxation(3,537)(3,526)
Deferred taxation(13,835)(10,000)
Total taxation (expense)(17,372)(13,526)
Key assumptions in calculating income tax
The key assumptions used in the preparation of the Group’s tax calculation are as follows:
Tax rate:
The New Zealand entities are subject to New Zealand tax on assessable income at the rate of 28%.
VHIT – This Australian Trust was established so that it qualifies as a Managed Investment Trust (MIT) for Australian tax purposes and
is subject to Australian tax on assessable income at the rate of 15%.
VHAPT – This Australian Trust is subject to Australian tax on assessable income at the rate of 15% after qualifying as a MIT for
Australian tax purposes in FY2017.
Imputation credits
Imputation (deficit)/credits at end of year(702)196
8 EARNINGS PER UNIT
Basic and diluted earnings per unit is calculated by dividing the profit attributable to unitholders of the Trust by the weighted average
number of ordinary units on issue during the year.
20182017
Profit attributable to unitholders of the Trust ($000s)100,065217,622
Weighted average number of units on issue (000's of units)434,322421,117
Basic and diluted earnings per unit (cents)23.0451.68

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
40FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8 EARNINGS PER UNIT (continued)
2018
$000s
2017
$000s
Distributable income
Profit before income tax117,437231,148
Revaluation (gains)(85,461)(168,549)
Unrealised foreign exchange (gain)/loss1,417(885)
Unrealised foreign exchange (gain)/loss derivatives300342
Unrealised interest rate (gain)/loss derivatives2,883(9,023)
Manager's incentive fee13,09612,314
Profit used in calculating gross distributable income49,67265,347
Current tax charge3,5373,526
Profit used in calculating net distributable income46,13561,821
Gross distributable income (cpu)11.4415.52
Net distributable income (cpu)10.6214.68
Distributions paid in the financial year were 8.50 cents per unit (2017: 8.50).
9 STATEMENT OF CASH FLOWS RECONCILIATION FROM OPERATING ACTIVITIES
2018
$000s
2017
$000s
Cash and cash equivalents
Australian financial institutions3,2112,529
New Zealand financial institutions2,177823
Cash at bank5,3883,352
Reconciliation of profit after income tax to net cash flows from operating activities
Profit after tax for the year100,065217,622
Adjustments for non-cash items
Change in fair value of investment properties(85,461)(168,549)
Fair value (gain)/loss on derivative financial instruments3,183(8,682)
Unrealised foreign exchange (gain)/loss1,417(885)
Deferred taxation13,83510,000
Income in advance(1,667)(2,115)
Manager's incentive fee13,09612,314
Other(1,140)348
Effect of exchange rate changes on cash balances-(3)
Operating cash flow before changes in working capital43,32860,050
Change in trade and other payables5,4281,907
Change in taxation payable(1,891)1,117
Change in trade and other receivables3,263(4,782)
Items classified as investing activities(4,414)(465)
Net cash from operating activities45,71457,827
During the 2018 year, distributions of $6,140,047 (2017: $5,927,848) have been reinvested under the Distribution Reinvestment Plan
(DRP), which is excluded from investing and financing activities.

41
10 INVESTMENT PROPERTIES
2018
$000s
2017
$000s
Carrying value of investment property at the beginning of the year1,376,243951,879
Acquisition of properties194,696223,562
Capitalised costs26,13431,637
Capitalised interest costs952302
Net capitalised incentives2,2492,048
Foreign exchange translation difference45,512(1,734)
Change in fair value85,461168,549
Carrying value of investment property at the end of the year1,731,2471,376,243
Carrying value of investment property includes:
Fair value of investment properties1,729,7051,372,587
Income in advance1,5423,656
Carrying value of investment property at the end of the year1,731,2471,376,243
The capitalised costs consist of $22.1m relating to Australian investment properties and $4.0m relating to New Zealand investment
properties. The foreign exchange translation difference relates to Australian investment properties.
The Group holds the freehold title to all properties except the car parks at the rear of Ascot Hospital and Ascot Central. The total
value of leasehold property at 30 June 2018 was $3.2m (2017: $3.2m) representing 0.2% of the total investment properties portfolio
(2017: 0.4%). The weighted average lease length of leasehold property at 30 June 2018 was 0.8 years (2017: 1.8 years). The Group
has an option to extend the ground lease, with two further rights of renewal of 20 years each. This will extend the final expiry to 2059.
Income in advance relates to a termination payment received of $10.0m, and will be amortised over a five year period to March 2019.
Investment properties are classified as Level 3 under the fair value hierarchy.
Investment properties are stated at fair value by independent valuers supported by market evidence of property sale transactions and
leasing activity. These valuations are reviewed by the Manager. The methods used for assessing the current market value are the
Direct Comparison, Discounted Cash Flow, Capitalisation of Contract and Market Income approaches and are unchanged from the
prior year. The principal assumptions in establishing the valuation include the capitalisation rate, occupancy and the weighted average
lease term to expiry (WALE) with the following table identifying the respective levels adopted by the Valuers within the Group’s
segment. Where significant development is in progress at a property, this is carried at cost, until the development is sufficiently close
to completion where fair value is estimated with reference to expected future rental streams and costs to complete the development.
Generally as occupancy and weighted average lease terms increase, yields firm, resulting in increased fair values for investment
properties.

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
42FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10 INVESTMENT PROPERTIES (continued)
Fair valueMarket capitalisation rateOccupancyWALE
PropertiesLocation30 June 2018 Valuer
$000s
2018
$000s
2017
%
2018
%
2017
%
2018
%
2017
Years
2018
Years
2017
Australia
Abbotsford Private HospitalWest Leederville, Western AustraliaErnst & Young28,38723,5175.56.3100.0100.023.724.7
Belmont Private HospitalCarina Heights, QueenslandCBRE79,15767,4025.35.8100.0100.017.718.7
Clover Lea Aged CareBurwood Heights, New South WalesErnst & Young13,86612,0737.07.5100.0100.017.718.7
Dubbo Private HospitalDubbo, New South WalesCBRE17,68815,8536.56.8100.0100.013.614.6
Eden RehabilitationCooroy, QueenslandErnst & Young26,051-5.8-100.0-19.5-
Ekera Medical CentreBox Hill, VictoriaJones Lang LaSalle Australia31,33529,8166.06.594.292.12.13.6
Epworth Eastern HospitalBox Hill, VictoriaJones Lang LaSalle Australia167,250150,1295.05.3100.0100.021.922.2
Epworth Eastern Medical CentreBox Hill, VictoriaJones Lang LaSalle Australia38,21431,1295.56.3100.0100.09.310.1
Epworth RehabilitationBrighton, VictoriaErnst & Young27,14323,4125.86.3100.0100.05.61.6
Fairfield Aged CareFairfield, New South WalesErnst & Young18,34316,4697.07.5100.0100.017.718.7
Gold Coast Surgery CentreSouthport, QueenslandCBRE15,28614,9617.27.069.268.21.61.8
Grafton Aged CareSouth Grafton, New South WalesCBRE11,2469,4497.58.0100.0100.018.819.8
Hamersley Aged CareSubiaco, Western AustraliaErnst & Young12,77411,8647.27.5100.0100.017.718.7
Hirondelle Private HospitalChatswood, New South WalesJones Lang LaSalle Australia27,51424,1475.56.0100.0100.023.924.9
Hurstville Private HospitalSydney, New South WalesJones Lang LaSalle Australia80,46786,0896.36.3100.0100.023.824.8
Lingard Private HospitalMerewether, New South WalesJones Lang LaSalle Australia136,860107,3415.86.3100.0100.022.723.7
Maitland Private HospitalEast Maitland, New South WalesJones Lang LaSalle Australia98,06782,9105.86.3100.0100.019.520.5
Marian CentrePerth, Western AustraliaErnst & Young49,02341,1555.56.3100.0100.016.117.1
Mayo Private HospitalTaree, New South WalesM339,08736,9556.56.5100.0100.013.514.5
Mons Road Medical CentreWestmead, New South WalesM335,48433,9115.86.096.9100.04.65.4
North West Private HospitalBurnie, TasmaniaM322,65520,5496.36.5100.0100.018.414.6
Palm Beach Currumbin ClinicCurrumbin, QueenslandCBRE55,68346,3325.56.0100.0100.013.614.6
Rockingham Aged CareRockingham, Western AustraliaErnst & Young6,6826,0687.57.8100.0100.017.718.7
South Eastern Private HospitalNoble Park, VictoriaErnst & Young60,05053,3335.56.0100.0100.022.723.7
Sportsmed ConsultingAdelaide, South AustraliaM38,0256,8505.86.0100.0100.017.618.6
Sportsmed Hospital & ClinicAdelaide, South AustraliaM358,08552,0735.86.0100.0100.016.917.9
Sportsmed OfficeAdelaide, South AustraliaM34,2583,8436.56.8100.0100.017.618.6
The Hills ClinicKellyville, New South WalesJones Lang LaSalle Australia34,720-5.5-100.0-29.1-
The Southport Private Hospital *Southport, QueenslandCBRE47,60342,6255.55.8100.0100.019.620.6
Toronto Private HospitalToronto, New South WalesCBRE38,24430,4846.06.3100.0100.024.525.5
1,289,2471,080,739
New Zealand
Apollo Health and Wellness CentreAlbany, AucklandJones Lang LaSalle New Zealand28,50027,0006.16.591.591.57.03.3
Ascot CentralGreenlane, AucklandAbsolute Value35,00029,0006.16.4100.098.42.62.9
Ascot Central Carpark (ground lease)Greenlane, AucklandAbsolute Value1,5501,5309.510.9100.0100.02.12.5
Ascot Hospital & ClinicsGreenlane, AucklandColliers International New Zealand Limited106,000102,5005.45.6100.099.517.618.5
Ascot Hospital Carpark (ground lease)Greenlane, AucklandColliers International New Zealand Limited1,6251,7009.59.8100.0100.025.026.0
Boulcott Private HospitalLower Hutt, WellingtonErnst & Young38,40035,8005.86.0100.0100.020.021.0
Bowen HospitalCrofton Downs, WellingtonErnst & Young44,300-5.5-100.0-29.5-
Kensington HospitalWhangarei, NorthlandJones Lang LaSalle New Zealand19,65018,9006.06.0100.0100.028.029.0
Napier Health CentreNapier, Hawkes BayColliers International New Zealand Limited10,80011,4779.07.9100.0100.01.52.5
Ormiston HospitalFlatbush, AucklandColliers International New Zealand Limited35,27533,0006.16.3100.0100.04.25.2
Royston HospitalHastings, Hawkes BayErnst & Young53,864-5.8-100.0-29.5-
Wakefield HospitalNewtown, WellingtonErnst & Young26,407-5.5-100.0-29.5-
401,371260,907
Properties held for development39,08730,941
TOTAL FAIR VALUE OF INVESTMENT PROPERTIES1,729,7051,372,5875.86.199.399.118.217.7
Income in advance1,5423,656
TOTAL CARRYING VALUE1,731,2471,376,243
* Formerly named Allamanda Private Hospital

43
Fair valueMarket capitalisation rateOccupancyWALE
PropertiesLocation30 June 2018 Valuer
$000s
2018
$000s
2017
%
2018
%
2017
%
2018
%
2017
Years
2018
Years
2017
Australia
Abbotsford Private HospitalWest Leederville, Western AustraliaErnst & Young28,38723,5175.56.3100.0100.023.724.7
Belmont Private HospitalCarina Heights, QueenslandCBRE79,15767,4025.35.8100.0100.017.718.7
Clover Lea Aged CareBurwood Heights, New South WalesErnst & Young13,86612,0737.07.5100.0100.017.718.7
Dubbo Private HospitalDubbo, New South WalesCBRE17,68815,8536.56.8100.0100.013.614.6
Eden RehabilitationCooroy, QueenslandErnst & Young26,051-5.8-100.0-19.5-
Ekera Medical CentreBox Hill, VictoriaJones Lang LaSalle Australia31,33529,8166.06.594.292.12.13.6
Epworth Eastern HospitalBox Hill, VictoriaJones Lang LaSalle Australia167,250150,1295.05.3100.0100.021.922.2
Epworth Eastern Medical CentreBox Hill, VictoriaJones Lang LaSalle Australia38,21431,1295.56.3100.0100.09.310.1
Epworth RehabilitationBrighton, VictoriaErnst & Young27,14323,4125.86.3100.0100.05.61.6
Fairfield Aged CareFairfield, New South WalesErnst & Young18,34316,4697.07.5100.0100.017.718.7
Gold Coast Surgery CentreSouthport, QueenslandCBRE15,28614,9617.27.069.268.21.61.8
Grafton Aged CareSouth Grafton, New South WalesCBRE11,2469,4497.58.0100.0100.018.819.8
Hamersley Aged CareSubiaco, Western AustraliaErnst & Young12,77411,8647.27.5100.0100.017.718.7
Hirondelle Private HospitalChatswood, New South WalesJones Lang LaSalle Australia27,51424,1475.56.0100.0100.023.924.9
Hurstville Private HospitalSydney, New South WalesJones Lang LaSalle Australia80,46786,0896.36.3100.0100.023.824.8
Lingard Private HospitalMerewether, New South WalesJones Lang LaSalle Australia136,860107,3415.86.3100.0100.022.723.7
Maitland Private HospitalEast Maitland, New South WalesJones Lang LaSalle Australia98,06782,9105.86.3100.0100.019.520.5
Marian CentrePerth, Western AustraliaErnst & Young49,02341,1555.56.3100.0100.016.117.1
Mayo Private HospitalTaree, New South WalesM339,08736,9556.56.5100.0100.013.514.5
Mons Road Medical CentreWestmead, New South WalesM335,48433,9115.86.096.9100.04.65.4
North West Private HospitalBurnie, TasmaniaM322,65520,5496.36.5100.0100.018.414.6
Palm Beach Currumbin ClinicCurrumbin, QueenslandCBRE55,68346,3325.56.0100.0100.013.614.6
Rockingham Aged CareRockingham, Western AustraliaErnst & Young6,6826,0687.57.8100.0100.017.718.7
South Eastern Private HospitalNoble Park, VictoriaErnst & Young60,05053,3335.56.0100.0100.022.723.7
Sportsmed ConsultingAdelaide, South AustraliaM38,0256,8505.86.0100.0100.017.618.6
Sportsmed Hospital & ClinicAdelaide, South AustraliaM358,08552,0735.86.0100.0100.016.917.9
Sportsmed OfficeAdelaide, South AustraliaM34,2583,8436.56.8100.0100.017.618.6
The Hills ClinicKellyville, New South WalesJones Lang LaSalle Australia34,720-5.5-100.0-29.1-
The Southport Private Hospital *Southport, QueenslandCBRE47,60342,6255.55.8100.0100.019.620.6
Toronto Private HospitalToronto, New South WalesCBRE38,24430,4846.06.3100.0100.024.525.5
1,289,2471,080,739
New Zealand
Apollo Health and Wellness CentreAlbany, AucklandJones Lang LaSalle New Zealand28,50027,0006.16.591.591.57.03.3
Ascot CentralGreenlane, AucklandAbsolute Value35,00029,0006.16.4100.098.42.62.9
Ascot Central Carpark (ground lease)Greenlane, AucklandAbsolute Value1,5501,5309.510.9100.0100.02.12.5
Ascot Hospital & ClinicsGreenlane, AucklandColliers International New Zealand Limited106,000102,5005.45.6100.099.517.618.5
Ascot Hospital Carpark (ground lease)Greenlane, AucklandColliers International New Zealand Limited1,6251,7009.59.8100.0100.025.026.0
Boulcott Private HospitalLower Hutt, WellingtonErnst & Young38,40035,8005.86.0100.0100.020.021.0
Bowen HospitalCrofton Downs, WellingtonErnst & Young44,300-5.5-100.0-29.5-
Kensington HospitalWhangarei, NorthlandJones Lang LaSalle New Zealand19,65018,9006.06.0100.0100.028.029.0
Napier Health CentreNapier, Hawkes BayColliers International New Zealand Limited10,80011,4779.07.9100.0100.01.52.5
Ormiston HospitalFlatbush, AucklandColliers International New Zealand Limited35,27533,0006.16.3100.0100.04.25.2
Royston HospitalHastings, Hawkes BayErnst & Young53,864-5.8-100.0-29.5-
Wakefield HospitalNewtown, WellingtonErnst & Young26,407-5.5-100.0-29.5-
401,371260,907
Properties held for development39,08730,941
TOTAL FAIR VALUE OF INVESTMENT PROPERTIES1,729,7051,372,5875.86.199.399.118.217.7
Income in advance1,5423,656
TOTAL CARRYING VALUE1,731,2471,376,243
* Formerly named Allamanda Private Hospital

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
44FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11 DERIVATIVE FINANCIAL INSTRUMENTS
2018
$000s
2017
$000s
Current assets
Foreign exchange derivative assets3632,554
Non-current assets
Interest rate derivative assets8561,499
Current liabilities
Interest rate derivative liabilities(35)(97)
Foreign exchange derivative liabilities(425)-
Non-current liabilities
Interest rate derivative liabilities(14,444)(12,142)
Total(13,685)(8,186)
Interest rate swaps
Interest rate swaps are measured using a valuation model based on the present value of estimated future cash flows and discounted
based on the applicable yield curves derived from observable market interest rates. The Group has determined the interest rate swaps
are Level 2 fair value measurements (refer to Note 3.(k)). There have been no reclassifications between levels in the year ended
30 June 2018 (2017: nil).
Interest rate derivatives mature over the next ten years and have fixed interest rates ranging from 2.41% to 4.99% (2017: from 2.41%
to 4.99%).
2018
$000s
2017
$000s
Nominal value of interest rate swaps - AUD490,000305,000
Average fixed interest rate3.21%3.37%
Floating rates based on AUD BBSW2.07%1.78%
Foreign exchange derivatives
Foreign exchange derivatives are measured using a valuation model based on the applicable forward price curves derived from
observable forward prices. The Group has determined the foreign exchange derivatives are Level 2 fair value measurements (refer to
Note 3.(k)). There have been no reclassifications between levels in the year ended 30 June 2018 (2017: nil).
2018
$000s
2017
$000s
Nominal value of foreign exchange contracts - AUD-50,000
Nominal value of foreign exchange options - AUD150,00050,000
Average foreign exchange rate0.90950.9252

45
12 DEFERRED TAX
The following are the major deferred tax liabilities and (assets) recognised by the Group, and the movements thereon during the
current and prior reporting years:
Interest rate
swaps
$000s
Revaluation
of investment
properties
$000s
Borrowings
$000s
Other
$000s
Total
$000s
At 1 July 2017(3,007)67,6147,136(24)71,719
Charge to profit and loss for the year(807)14,705-(63)13,835
Change in exchange rate-2,6212622,685
Charge to other comprehensive income--(794)(649)(1,443)
At 30 June 2018(3,814)84,9406,344(674)86,796
At 1 July 2016(5,534)60,6187,2111,37463,669
Charge to profit and loss for the year2,5277,036-43710,000
Change in exchange rate-(40)-(1)(41)
Charge to other comprehensive income--(75)(1,834)(1,909)
At 30 June 2017(3,007)67,6147,136(24)71,719
Significant estimates and judgements made in the determination of deferred tax (with an impact on current tax) include:
Deferred tax on depreciation – deferred tax is provided in respect of depreciation expected to be recovered on the sale of investment
property at fair value.
Deferred tax on changes in fair value of investment properties – deferred tax is provided on New Zealand-based properties for
depreciation recovery on the building components, being the taxable temporary difference. Deferred tax for Australian-based
properties is provided on the capital gains tax expected to be assessable on the land and building component from the sale of
investment properties at fair value. Investment properties are valued each year by independent valuers (as outlined in Note 10).
Deferred tax on fixtures and fittings – it is assumed that all fixtures and fittings will be sold at their tax book value.
13 OTHER NON-CURRENT ASSETS
2018
$000s
2017
$000s
Related party advance (refer to note 22)43,673-
Other311327
Total43,984327

14 UNITS ON ISSUE
2018
$000s
2017
$000s
Balance at the beginning of the year538,469369,220
Issue of units under Distribution Reinvestment Plan6,1405,928
Issue of units under Rights Issue-159,932
Issue of units to satisfy Manager's incentive fee12,3146,317
Issue costs of units(45)(2,928)
18,409169,249
Balance at the end of the year556,878538,469

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
46FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14 UNITS ON ISSUE (continued)
2018
000s
2017
000s
Reconciliation of number of units
Balance at the beginning of the year428,562345,998
Issue of units under the Distribution Reinvestment Plan2,8912,795
Units issued under Rights Issue-76,891
Units issued to satisfy Manager's incentive fee5,4402,878
Balance at the end of the year436,893428,562
The number of units on issue at 30 June 2018 was 436,893,108 (2017: 428,562,486). The units have no par value and are fully paid.
Fully paid ordinary units carry one vote per unit and carry the right to distributions.
On 23 August 2017, 5,440,157 units were issued against the 2017 Manager’s incentive fee of $12,314,339 (2017: 2,877,727 were issued
against the 2016 Manager’s incentive fee).
Capital risk management
The Group is subject to imposed capital requirements arising from the Trust Deed, which requires that the total borrowings do not
exceed 50% of the gross value of the Trust Fund.
The Group’s banking covenants require that the aggregate principal amount of the loan outstanding does not exceed 50% (2017: 50%)
of the fair market value of property at all times calculated to the New Zealand dollar equivalent. All banking covenants have been met
during the year.
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and equity balance. The Group’s policies in respect of capital management
and allocation are reviewed regularly by the Board of Directors. There have been no material changes in the Group’s overall capital
risk management strategy during the year.
15 BORROWINGS
2018
$000s
2017
$000s
AUD denominated loans664,374402,649
NZD denominated loans5,750-
Borrowing costs(1,412)(770)
Total borrowings668,712401,879
Shown as:
Current--
Term668,712401,879
2018
$000s
2017
$000s
Total borrowing at the beginning of the year401,879344,159
Drawdowns during the year249,909219,989
Repayments during the year-(163,843)
Additional facility refinancing fee(1,029)-
Facility refinancing fee amortised during the year468386
Foreign exchange movement17,4851,188
Total borrowings at the end of the year668,712401,879
The Group has a syndicated revolving multi-currency facility with ANZ Bank New Zealand Limited, Australia and New Zealand Banking
Group Limited and Bank of New Zealand.

47
15 BORROWINGS (continued)
20182017
TrancheA$mExpiryA$mExpiry
A125.031 Mar-21125.031 Mar-19
B200.031 Jul-22100.031 Mar-19
C100.030 Oct-20100.030 Oct-20
D100.030 Oct-20100.030 Oct-20
E
175.0
20 Nov-21
-
A$ Facility
700.0425.0
NZ$ Facility
20.0
30 Oct-20
20.0
30 Oct-20
On 5 June 2018 the Group extended and expanded existing tranches with ANZ and BNZ that were due to expire on 31 March 2019.
Tranche A, representing A$125m, was extended to 31 March 2021. Tranche B was expanded to A$200m (from A$100m previously)
and extended to 31 July 2022.
The effective interest rate on the borrowings as at 30 June 2018 was 4.60% per annum (2017: 4.34%).
Borrowings are secured by a Security Trust Deed dated 1 April 2003 and as amended and restated on 26 June 2014. The Security
Provider comprises T.E.A. Custodians Limited in its capacity as nominee of the VHP Trustee as trustee of the Trust and the Trust’s
subsidiaries. Pursuant to the Deed, a security interest has been granted of first ranking mortgages over the respective investment
properties by a General Security Deed over the assets and undertakings of Vital Healthcare Property Limited and fixed and floating
charges over the assets and undertakings of NorthWest Healthcare Australian Property Pty Limited in its capacity as trustee for Vital
Healthcare Australian Property Trust and Vital Healthcare Investment Trust.
The carrying values of these balances are approximately equivalent to their fair values because the loans have floating rates of
interest that reset every 90 days.
16 TRADE AND OTHER PAYABLES
2018
$000s
2017
$000s
Interest accrued on borrowings2,8601,884
Other creditors and accruals14,1059,653
Total trade and other payables16,96511,537
17 FINANCIAL RISK MANAGEMENT
Financial risk management
The Group’s activities expose it primarily to credit risk, market risk (interest rate risk and foreign exchange risk) and liquidity risk. The
Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s financial performance. The Group uses financial derivatives to manage market risks. The use of
financial derivatives is governed by the Group’s policies approved by the Board of Directors, which provide written principles that are
consistent with the Group’s risk management strategy. The Group does not use derivative financial instruments for speculative
purposes.
Credit risk
In the normal course of business the Group incurs credit risk from trade receivables and transactions with financial institutions. The
risk associated with trade receivables is managed with a credit policy which includes performing credit evaluations on customers
requiring credit. Generally collateral is not required. The risk from financial institutions is managed by only entering into derivative
transactions and placing cash and deposits with high credit quality financial institutions. The Group places its cash deposits with ANZ
Bank New Zealand Limited and Australia and New Zealand Banking Group Limited. The risk associated with related party advances is
managed through a diligence process where the recoverability of the advance is assessed before the advance is made.
The carrying amount of financial assets best represents the maximum exposure to credit risk at year end.
Interest rate risk
Interest rate risk arises from the variability in cash flows arising from floating rate bank loans. The Group’s policy is to convert a
portion of its floating rate debt to fixed rates using interest rate swaps to maintain 70% to 100% of its borrowings in fixed rate
instruments. At 30 June 2018, 79.8% of borrowings were at fixed rates as approved by the Board of Directors (2017: 79.5%). The
Group does not apply hedge accounting to interest rate swaps. Any gains or losses arising on revaluation are recognised immediately
in the statement of comprehensive income.

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
48FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17 FINANCIAL RISK MANAGEMENT (continued)
Interest rate repricing analysis
The following table indicates the effective interest rates and the earliest period in which financial instruments reprice. Fixed rate
balances are presented with the effect of hedging derivatives:
Weighted
effective
interest rate
%
Less than
1 year
$000s
1-2 years
$000s
2-3 years
$000s
3+ years
$000s
Total
$000s
30 June 2018
Cash and cash equivalents (floating
rates)
2.07%5,388---5,388
Borrowings (floating rates)2.72%(135,131)---(135,131)
Borrowings (fixed rates)3.86%(10,918)(54,591)(21,836)(447,648)(534,993)
(140,661)(54,591)(21,836)(447,648)(664,736)
30 June 2017
Cash and cash equivalents (floating
rates)
1.78%3,352---3,352
Borrowings (floating rates)2.29%(82,438)---(82,438)
Borrowings (fixed rates)3.89%(15,748)(10,499)(52,493)(241,470)(320,210)
(94,834)(10,499)(52,493)(241,470)(399,296)
Interest rate sensitivity
The Group’s sensitivity to interest rate risk can be expressed in two ways:
Fair value sensitivity
A change in interest rates impacts the fair value of the Group’s fixed rate assets and liabilities, and its interest rate swaps. Fair value
changes impact profit or loss or equity only where the instruments are carried at fair value. Accordingly, the fair value sensitivity to a
100 bps movement in interest rates (based on the assets and liabilities held at year end) is:
Impact on
profit/(loss)
2018
$000s
Impact on
unitholders'
funds
2018
$000s
Impact on
profit/(loss)
2017
$000s
Impact on
unitholders'
funds
2017
$000s
If interest rates had been 100 bps higher:29,68329,68315,14815,148
If interest rates had been 100 bps lower:(32,582)(32,582)(16,533)(16,533)
Cash flow sensitivity analysis
A change in interest rates would also impact on interest payments and receipts on the Group’s floating rate assets and liabilities.
Accordingly, the one-year cash flow sensitivity to a 100 bps movement in interest rates (based on assets and liabilities held at year
end) is:
Impact on
profit/(loss)
2018
$000s
Impact on
unitholders'
funds
2018
$000s
Impact on
profit/(loss)
2017
$000s
Impact on
unitholders'
funds
2017
$000s
If interest rates had been 100 bps higher:(1,294)(1,294)(824)(824)
If interest rates had been 100 bps lower:1,2941,294824824

49
17 FINANCIAL RISK MANAGEMENT (continued)
Foreign exchange risk
Foreign exchange risk arises due to the exposure of Australian denominated assets and liabilities to movements in foreign exchange
rates. The Group minimises foreign exchange risk by matching as far as possible, its foreign denominated assets and associated
borrowings in the same currency and entering into foreign exchange derivatives where necessary.
Foreign exchange exposure
The exposure to Australian dollars arising from foreign currency denominated assets and liabilities is:
2018
$000s
2017
$000s
Non-financial instrument assets and liabilities denominated in Australian dollars
Investment properties1,327,1041,110,530
Other assets175,70112,170
Deferred tax(80,673)(63,723)
Total non-financial instrument assets and liabilities1,422,1321,058,977
Non-derivative financial instruments
Cash and cash equivalents3,2112,529
Trade and other receivables842152
Trade and other payables(17,401)(14,184)
Borrowings(664,374)(402,649)
Total exposure from non-derivative financial instruments(677,722)(414,152)
Derivative financial instruments
Foreign exchange derivatives(62)2,554
Interest rate swaps(13,624)(10,741)
Total exposure from derivative instruments(13,686)(8,187)
Net exposure to currency risk730,724636,638
Foreign currency sensitivity
The following table illustrates the sensitivity of the profit after tax for the year and equity in regard to the exchange rates for the
Australian Dollar. It assumes a 10% change in exchange rate (2017: 10%) based on year end exposures:
2018
$000s
2017
$000s
If the New Zealand Dollar versus the Australian Dollar was 10% higher for the year:
Profit and loss1,9784,621
Other comprehensive income(60,884)(57,519)
Unitholders' funds(58,906)(52,898)
If the New Zealand Dollar versus the Australian Dollar was 10% lower for the year:
Profit and loss(2,417)(5,648)
Other comprehensive income74,41470,301
Unitholders' funds71,99764,653

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
50FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17 FINANCIAL RISK MANAGEMENT (continued)
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations as they fall due. The Group’s policy is to maintain
unutilised credit facilities to meet contractual obligations when they fall due. The Group monitors its liquidity requirements on an
ongoing basis.
The Group has a multi-currency facility with ANZ Bank New Zealand Limited, Australia and New Zealand Banking Group Limited and
Bank of New Zealand of A$700.0m and NZ$20.0m (2017: A$425.0m and NZ$20.0m). As at 30 June 2018, after translation to NZ
$670.1m (2017: NZ$402.6m) had been drawn-down. The effective interest rate was 4.60% (2017: 4.34%).
Liquidity risk exposure
The following table details the Group’s exposure to liquidity risk based on the contractual undiscounted cash flows relating to financial
liabilities, foreign exchange contracts and interest rate derivatives:
Carrying
value
$000s
Contractual
cash flows
$000s
Less than 1 year
$000s
1-2 years
$000s
2-3 years
$000s
3+ years
$000s
30 June 2018
Non-derivative financial
instruments
Borrowings (excluding
borrowing costs)(670,124)(711,895)(13,384)(14,298)(366,960)(317,253)
Trade and other payables(16,965)(16,965)(16,965)---
(687,089)(728,860)(30,349)(14,298)(366,960)(317,253)
Derivative financial
instruments
Interest rate swaps(13,623)(14,760)(6,004)(4,934)(3,550)(272)
Foreign exchange
derivatives(62)(62)(62)---
(13,685)(14,822)(6,066)(4,934)(3,550)(272)
30 June 2017
Non-derivative financial
instruments
Borrowings (excluding
borrowing costs)(402,649)(422,299)(7,112)(243,244)(3,886)(168,057)
Trade and other payables(11,537)(11,537)(11,537)---
(414,186)(433,836)(18,649)(243,244)(3,886)(168,057)
Derivative financial
instruments
Interest rate swaps(10,741)(11,114)(4,987)(4,039)(2,547)459
Foreign exchange
derivatives-----
(10,741)(11,114)(4,987)(4,039)(2,547)459
Hedge accounting
The Group is exposed to foreign exchange risk on its net investment in its Australian functional currency subsidiaries and hedges this
risk using Australian-denominated borrowings and foreign exchange derivatives.
The Group has designated Australian denominated borrowings and foreign exchange derivatives as hedges of a net investment in a
foreign operation (net investment hedge). The Group prospectively and retrospectively tests the hedges for effectiveness on a semi-
annual basis. The portion of the foreign exchange differences arising on the hedging instruments determined to be an effective hedge
is recognised directly in other comprehensive income. Any ineffective portion is recognised in profit or loss.
There has been an ineffectiveness loss of NZ$145,455 on the net investment hedges during the year ended 30 June 2018 (2017: nil).
The face value of hedging instruments designated in net investment hedges is:
2018
$000s
2017
$000s
Borrowings131,01994,488
Foreign exchange derivatives (nominal amount)163,773104,987

51
17 FINANCIAL RISK MANAGEMENT (continued)
Categories of financial instruments
The Group’s financial instruments are classified as:
Cash,
loans and
receivables
$000s
Financial
liabilities at
amortised cost
$000s
Financial
assets at fair
value through
profit or loss
$000s
Financial
liabilities at fair
value through
profit or loss
$000s
30 June 20186,577(685,677)1,219(14,904)
30 June 20173,719(413,415)4,054(12,240)
Cash, cash equivalents, trade and other receivables, trade and other payables
The carrying values of these balances are approximately equivalent to their fair values because of their short terms to maturity.
18 INVESTMENT IN SUBSIDIARIES
The Trust has control over the following subsidiaries:
Holding
Name of subsidiaryPrincipal activity
Place of
incorporation
and operation20182017
Vital Healthcare Australian Property Trust *Property investmentAustralia100%100%
Vital Healthcare Investment Trust **Property investmentAustralia100%100%
Vital Healthcare Property LimitedProperty investmentNew Zealand100%100%
Colma Services LimitedHolding companyNew Zealand100%100%
* Vital Healthcare Australian Property Trust is a 100% owned subsidiary of Vital Healthcare Property Limited and Colma Services Limited owns 0.0%
.
** Vital Healthcare Investment Trust is a 99.9% owned subsidiary of Vital Healthcare Property Limited and is 0.1% owned by Colma Services Limited.
The subsidiaries have the same reporting date as the Trust.
19 COMMITMENTS
2018
$000s
2017
$000s
Capital commitments
The Group was party to contracts to purchase or construct property for the following amounts:9,18378,234
The property rental income to be earned by the Group from its investment property, all of which is leased out under operating leases,
is set out in the table below:
2018
$000s
2017
$000s
Not later than one year98,15780,901
Later than one year and not later than five years433,381293,850
Later than five years899,9111,059,951
1,431,4491,434,702
As a condition of listing on the New Zealand Stock Exchange (NZSX), NZSX requires all issuers to provide a bank bond to NZSX under
NZSX/DX Listing Rule 2.6.2. The bank bond required by the Trust for listing on the NZSX is $50,000.
20 CONTINGENCIES
There were no contingencies as at 30 June 2018 (2017: nil).

VITAL HEALTHCARE PROPERTY TRUST ANNUAL REPORT 2018
52FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21 SUBSEQUENT EVENTS
On 9 August 2018 a final cash distribution of 2.1875 cents per unit was announced by the Trust. The Record Date for the final
distribution is 6 September 2018 and a payment is scheduled to unitholders on 20 September 2018. There will be no imputation
credits attached to the distribution.
22 RELATED PARTY TRANSACTIONS
The Manager
The Trust is managed by NorthWest Healthcare Properties Management Limited (formerly Vital Healthcare Management Limited).
NorthWest Healthcare Properties Management Limited (the “Manager”) is a wholly owned subsidiary of NWI Healthcare Properties LP
(NWIHLP). The ultimate parent of NWIHLP is NorthWest Healthcare Properties Real Estate Investment Trust (‘NW REIT’). NW REIT
holds an interest in the Trust through its holding of approximately 24% of the units. The Manager is related to the Trust and its
subsidiaries as the Manager of the Trust.
Other related parties by virtue of common ownership and/or ownership and/or directorship to the Manager of the Trust include
Australian Properties Limited and NorthWest Healthcare Australian Property Proprietary Limited (formerly Vital Healthcare
Australian Property Pty Limited).
Remuneration of the Manager
The Trust paid management fees to the Manager. The calculation of management fees and incentive fees is stipulated in the Trust
Deed. Management fees have been charged at 0.75% per annum of the monthly average of the gross value of the assets of the Trust
for the quarter ended on the last day of that month. Incentive fees are payable when there is an average annual increase in the Gross
Value of the assets of the Trust Fund over the relevant financial year and the two preceding financial years. The incentive fee
calculation may give rise to an excess or deficit to be applied in the calculation of future incentive fees.
The incentive fee is 10% of the amount of the increase with payment being made by way of subscribing for new units. The
management and incentive fees shall not exceed an amount equal to 1.75% per annum of the gross value of the Trust.
Transactions with related parties include:
2018
$000s
2017
$000s
Total fees incurred
Management fees11,8568,073
Manager's incentive fees13,09612,314
Expenses charged by NorthWest Healthcare Properties Management Limited1,4422,088
Expenses charged by NorthWest Healthcare Australian Property Proprietary Limited1,7332,949
28,12725,424
Amounts outstanding
Manager's incentive fees13,09612,314
Expenses charged by NorthWest Healthcare Properties Management Limited-1,212
Expenses charged by NorthWest Healthcare Australian Property Proprietary Limited17318
13,11313,844
Expenses charged by related parties includes property related costs, acquisitions and development fees and other operating expenses.
2018
$000s
2017
$000s
Expenses capitalised to projects
Expenses charged by NorthWest Healthcare Properties Management Limited1,3021,563
Expenses charged by NorthWest Healthcare Australian Property Proprietary Limited8472,395
2,1493,958
Properties owned by the Trust have been managed on normal commercial terms by NorthWest Healthcare Properties Management
Limited, a subsidiary of NWI Healthcare Properties LP. Property management fees charged are included in property expenses. The
amount not recovered from tenants was nil (2017: nil).

53
22 RELATED PARTY TRANSACTIONS (continued)
Included in the expenses charged by NorthWest Healthcare Properties Management Limited were amounts paid to the following:
ExpensesAmounts Outstanding
2018
$000s
2017
$000s
2018
$000s
2017
$000s
Graeme Horsley40---
Andrew Evans50---
Claire Higgins40---
Other Related Parties
NWH Australia AssetCo Pty Limited as trustee of NWH Australia Asset Trust (NWHAAT) is a wholly owned subsidiary of NWI
Healthcare Properties LP.
Acquisition of an Interest in Healthscope Ltd (“HSO”) by NWHAAT.
During the year the NWHAAT entered into derivative contracts with Deutsche Bank AG (“DB”) giving NWHAAT an economic interest
equivalent to 10% of the outstanding shares of HSO. The derivative contracts include a forward contract to acquire HSO shares and an
option contract that limits downside risk and upside potential and reduces the initial margin requirements of the transaction.
The forward contract gives NWHAAT the ability to acquire, and DB the obligation to deliver, 173,970,330 to 176,111,600 HSO shares
at a price of A$2.3863 per share on May 8, 2020, or earlier, at the NWHAAT’s option, if a voting meeting is scheduled for HSO or HSO
receives a formal takeover bid. The NWHAAT prepaid A$85,254,703 of the A$415,148,293 notional amount of the forward contract.
The forward contract contemplates physical settlement, but may be net settled in certain circumstances. Under the forward contract
NWHAAT is entitled to receive payments from DB equivalent to dividends declared by HSO and NWHAAT pays variable interest to DB
on the underlying embedded funding contained in the forward contract at the Bank Bill Swap Rate plus 3%.
The option contract is a zero cost collar for 173,970,330 options that limits the benefits to the NWHAAT of HSO share price
appreciation above A$2.60 and limits the NWHAAT’s exposure to HSO share price depreciation below A$2.00 down to A$1.25 per
share.
An acquisition of HSO's underlying hospital related real estate is of interest to NWHAAT and the Trust in line with their long term
strategy to invest in healthcare real estate assets in the Australasian market. NWHAAT and the Trust currently intend to pursue any
potential HSO real estate acquisition jointly, in accordance with the Conflicts Policy, with scope to introduce other capital partners as
appropriate.
On 6th of May 2018, the Trust entered into an agreement with NWHAAT to advance A$41m to NWHAAT, of which A$40m has been
advanced as at 30 June 2018. NWHAAT has used the proceeds of the advance to prepay a portion (A$85,254,703) of a forward
contract to acquire 173,970,330 shares of HSO.
In accordance with the intention of the Conflict Policy, Vital has the benefit of participating in the opportunity and have agreed to
jointly pay the costs and jointly share the benefits and risks of the mark to market risk of the arrangement with DB.
2018
$000s
2017
$000s
During the year there have been transactions between the Trust and NWHAAT
Related party advance43,673-
Interest income283
Strategic transaction costs(3,517)-
Balances outstanding at the end of the year are unsecured and on normal trading terms
Amounts owing from related party43,956-
Amounts owing to related party(3,517)-

54



Independent Auditor’s Report
To the Unitholders of Vital Healthcare Property Trust
Opinion We have audited the consolidated financial statements of Vital Healthcare Property Trust and its
controlled entities (the ‘Group’ or ‘Trust’), which comprise the consolidated statement of financial
position as at 30 June 2018, and the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, and notes to the consolidated financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying financial statements, on pages 29 to 53, present fairly, in all
material respects, the consolidated financial position of the Group as at 30 June 2018, and its
consolidated financial performance and cash flows for the year then ended in accordance with
New Zealand Equivalents to International Financial Reporting Standards (‘NZ IFRS’) and
International Financial Reporting Standards (‘IFRS’).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and
International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and
Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor, we have no relationship with or interests in the Group.
Audit materiality





We consider materiality primarily in terms of the magnitude of misstatement in the financial
statements of the Group that in our judgement would make it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced (the
‘quantitative’ materiality). In addition, we also assess whether other matters that come to our
attention during the audit would in our judgement change or influence the decisions of such a
person (the ‘qualitative’ materiality). We use materiality both in planning the scope of our audit
work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $2.4 million.
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter How our audit addressed the key audit matter and results
Valuation of Investment Properties
The Group’s investment properties consist of health
sector properties totalling $1,731.2 million as at 30
June 2018. Revaluation gains on the Group’s
investment properties for the year ended 30 June 2018
of $85.4 million were recognised in profit or loss.
Information about the Group’s property portfolio and
valuation are set out in Note 10.
The valuation of investment properties is important to
our audit as determining the fair value requires
significant judgement and the balance represents the
majority of the total assets of the Group.
Investment properties are carried at fair value. Where
significant development is in progress at a property,
this is carried at cost, until the development is
sufficiently close to completion where fair value is

We have evaluated the appropriateness of the valuation of
investment property by performing the following:
 Obtaining metrics for each property, including capitalisation
rate, market rent and contract rent. We considered these
metrics on a property and portfolio basis for year on year
movements to identify possible outliers.
 Agreeing property specific information supplied to the
external valuer, including occupancy data, current rentals,
and lease terms, to the underlying records held by the Group
on a sample basis;
 Reviewing the external valuers’ valuation reports, holding
discussions with the valuers on a sample basis and
challenging assumptions where, on a year on year basis, the
movements represented a possible outlier compared with the
rest of the portfolio;
 Evaluating the objectivity, independence and expertise of the

55



estimated with reference to expected future rental
streams and costs to complete the development.
The valuation of investment property is highly
dependent on forecasts and estimates including a
number of unobservable inputs to take into account
property-specific attributes.
The Group’s policy is to engage external valuers to
perform valuations for each of the properties on an
annual basis. The valuation methods used for assessing
the fair value include a combination of direct
comparison, discounted cash flow, capitialisation of
contract and market capitalisation approaches.
The external valuers, amongst other matters, take into
consideration occupancy rates, weighted average lease
term to expiry (‘WALE’) and capitalisation rates.

external valuers;
 With respect to significant property developments,
o where management has determined the
development is sufficiently close to completion,
obtaining evidence supporting management’s
estimates of the expected future rental cash flows
that will apply upon completion and the costs to
complete the development;
o where property developments are carried at cost,
testing the cost incurred to date on a sample
basis;
 Involving our valuation specialists to consider and challenge,
on a sample basis, the reasonableness of the assumptions
and valuation methodology applied, including comparing
assumptions to market-available data where available.

Other information

The Board of Directors of Northwest Healthcare Management Limited (the ‘Manager’) is
responsible on behalf of the Trust for the other information. The other information comprises the
information in the Annual Report that accompanies the consolidated financial statements and the
audit report.
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If so, we are required to report that fact. We have
nothing to report in this regard.
Board of Directors’
responsibilities for the
consolidated financial
statements
The Board of Directors of the Manager is responsible on behalf of the Trust for the preparation
and fair presentation of the consolidated financial statements in accordance with NZ IFRS and
IFRS, and for such internal control as the Board of Directors of the Manager determines is
necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors of the Manager is responsible on
behalf of the Trust for assessing the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless the Board of Directors of the Manager either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities
for the audit of the
consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs and ISAs (NZ)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1
This description forms part of our auditor’s report.
Restriction on use

This report is made solely to the Trust’s unitholders, as a body. Our audit has been undertaken so
that we might state to the Trust’s unitholders those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Trust’s unitholders as a body, for our
audit work, for this report, or for the opinions we have formed.

Silvio Bruinsma, Partner
for Deloitte Limited
Auckland, New Zealand
9 August 2018