Vital 2019 Annual Meeting

VITAL HEALTHCARE
PROPERTY TRUST
A N N U A L M E E T I N G | 3 1 O C T O B E R 2 0 1 9

MEETING AGENDA
Introduction from the Chair of the Meeting
Address of the Chairman of the Manager
Address of the Interim Manager
Questions
Voting
General Business
Close of Meeting
Refreshments
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Chair of Meeting -Tracey Cross
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Board of the Manager
B E R N A R D C R O T T Y
CHAIRMAN
A N D R E W E V A N S
INDEPENDENT DIRECTOR
P A U L D A L L A L A N A
CEO NORTHWESTHEALTHCARE
G R A H A M S T U A R T
INDEPENDENT DIRECTOR
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

M A N A G E M E N T T E A M
In Attendance
M I L E S W E N T W O R T H
INTERIM MANAGER
S T U A R T H A R R I S O N
CHIEF FINANCIAL OFFICER
S U P E R V I S O R , A U D I T A N D L E G A L
J U S T I N E W E A L L E A N S
TRUSTEES EXECUTORS
S I L V I O B R U I N S M A
DELOITTE
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
C H R I S A D A M S
EXECUTIVE DIRECTOR, PROJECTS
R I C H A R D R O O S
EXECUTIVE DIRECTOR, PORTFOLIO
T O B Y S H A R P E
BELL GULLY

Address of the Chairman of the Manager
B E R N A R D C R O T T Y , C H A I R M A N
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Address of the Chairman of the Manager
AGENDA
Overview of our financial performance
Recap of the Healthscopeopportunity
Fees and Governance review
Wrap-up and outlook
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

FY19 Financial Performance
$51.0m
NormalisedNet
Distributable Income
2.3%
Like-for like same
currency rental growth
27.5%
Total return in FY2019
$104m
Gain from property
revaluations
VITAL HAS CONTINUED TO DELIVER VALUE
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Healthscoperecap
Healthscope’sreal estate assets represented an opportunity to
acquire a scale portfolio of high quality assets
However, after significant consideration, it was determined by
Vital’sBoard of Directors not to proceed
This decision took into account:
Vital’sinvestment objectives
The structure of the transaction,
Vital’sprevailing cost of equity
Investor feedback
A MATERIAL OPPORTUNITY WAS ACTIVELY PURSUED BUT ULTIMATELY DECLINED
A$1.25B
Size of Heatlhscope
real estate portfolio
considered
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
A$625m
Vital’s50% share of
the opportunity

Fee and Governance Review
A CONSIDERED, COMMERCIAL NEGOTIATION WITH INPUT FROM STAKEHOLDERS
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Two key initiatives:
A commitment to undertake a fees review
Review aspects of our governance structure
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Fee and Governance Review (continued)
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UNITHOLDERS TO HAVE THEIR SAY ON FEES AND GOVERNANCE
Resolution One: Approval of Trust Deed Amendments
Amended fee and governance regime
Deed modified to reflect the change in Manager fees, comply with new NZX
rules, modernisepractices (such as electronic voting), and modernisethe
language of the Trust Deed
A 75% majority of unitholders who vote is required
NorthWestHealthcare Properties REIT and the directors of the Manager
are restricted from voting
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Fee and Governance Review (continued)
A CONSIDERED, COMMERCIAL NEGOTIATION WITH INPUT FROM STAKEHOLDERS
Announced in November 2018 that a review of management fees would be undertaken
in the first quarter of 2019
Board-led process included:
EY was engaged to provide research support across a variety of matters associated
with external specialist managers
Engagement from unitholders representing approximately 40% of the register
(excluding NWH REIT)
Agreement on a new structure reached between the Independent Directors and NWH
REIT announced 1 April 2019 to be effective from 1 April 2019
Independent review by Deloitte confirmed LOWERfees would have been charged with
higher earnings of $2.1m in FY19, a 4.1% increase in distributable income
Vote on this today
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Effect of proposed fee change
APPLIED TO THE LAST TWO FISCAL YEARS
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
ChangeFY2018FY2019
NormalisedNDI
1
change($000’s)$2,514$2,112
change(%)5.1%4.1%
Net Tangible
Assets
change($000’s)($658)87
change(%)0.0%0.0%
1. Includes savings from proposed change to incentive fee calculation

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Lower base fees
Tiered base fees
Activity and service fees charged at market rates
Incentive based on Net Assets as opposed to Gross Assets with a 3 year
highwatermark
The Independent Directors recommend unitholders
vote in FAVOUR of the Trust Deed Amendments
Summary
ENHANCED EARNINGS AND VALUE FOR ALL STAKEHOLDERS
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Key executive appointments with an orderly transition
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
A A R O N H O C K L Y, F U N D M A N A G E R
MrHocklyis a New Zealand National, based in Auckland
17 years of senior management roles
Former Chief Operating Officer for Growthpoint Properties
Australia (A$4.1bn of funds under management)
Experience with strategy, transaction structuring and execution (property, debt
and equity), reporting and investor relations
M I C H A E L G R O T H, C H I E F F I N A N C I A L O F F I C E R
MrGrothis a qualified Chartered Accountant
Over thirteen years’ experience in senior finance roles in the listed and unlisted
property funds and funds management industry
Was the Group Chief Financial Officer of the Melbourne based and ASX listed
APN Property Group Limited (A$2.8bn of funds under management)
Experience with healthcare property funds management
15

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Search for new Independent Director
IN PROGRESS
Announced in September 2019 that we would bring on an additional independent director to
the board by the end of calendar 2019
Following this appointment the Board will consist:
Three independent directors
Two NorthWestdirector representatives
Also announced we would appoint an independent Board Chair by the 2020 Annual Meeting
External recruitment firm is assisting and has provided a list of candidates
Search is progressing well, expect process to be complete before the end of calendar 2019
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

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Investigating a Foreign Exempt ASX Listing
We continue to review options and initiatives to enhance Vital’saccess to capital at the lowest
possible cost
We are investigating a foreign exempt listing on the ASX (NZX to remain Primary listing) along with
related structural considerations.
Early indications from exploratory work are positive but there can be no assurance that this
initiative will proceed
If the initiative is progressed it would be subject to a Unitholder vote
Further update on progress to be provided at or before the release of H1 results in February 2020
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

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Wrap Up
Strong Financial Results
Fees and governance changes brought forward for your approval
Reaffirm FY20 Distribution of “at least” 8.75cpuwith a review at Interim Results in
February 2020
Fund Manager appointed
Independent Director search progressing well and will be appointed before the end
of the year
Investigating ASX foreign exempt listing
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Address of the Interim Manager of the Manager
M I L E S W E N T W O R T H , I N T E R I M M A N A G E R
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Address of the Interim Manager
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AGENDA
FY2019 financial results
Performance of the property portfolio
Update on Wakefield (Wellington) and Epworth Eastern (Melbourne) projects
Brief overview of the Fund’s capital management
Outlook for the Fund
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

FY19 Financial Highlights
STRONG PERFORMANCE
$51.0m
NormalisedNDI
+3.8%
2.3%
Like-for like rental
growth
35.3%
Debt to Total Assets
$2.31
Net tangible assets
per unit +2%
8.75cps
Annual Distribution
+2.2%
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27.5%
Total return in FY2019
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Property portfolio
Revaluation gain of $104m or 6.0%
77% of gain from Australian portfolio, 23% from New Zealand
Renewed 32 leases at positive spreads
Lease expiries in FY20 and FY21 primarily reflect smaller tenancies at multi-tenant
properties, with a high expectation of renewal
Weighted average lease term of 18.1 years
Occupancy of 99.4%
STRONG PROPERTY REVALUATION GROWTH
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Projects update
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Committed projects
BROWNFIELDS DRIVING VALUE-ADD OUTCOMES, PROVIDING ENHANCED EARNINGS GROWTH AND FURTHER IMPROVES ASSET QUALITY
(1)Stage 1 with a forecast development cost of $37m has commenced, Stages 2 and 3 for $61m are in the advanced planning phases
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Wakefield Hospital development
Hawkins Construction
appointed for the $37m first
stage of a planned $98m
three stage redevelopment
Wakefield Hospital will offer
patients access to some of
the most advanced medical
services and treatment in
New Zealand
Stage 1 completion expected
in the first quarter of calendar
2021
THE PROJECT WILL FURTHER ENHANCE WELLINGTON’S PREEMINENT PRIVATEHOSPITAL
6.3%
RENTALISATION YIELD
NZ$98m
TOTAL INVESTMENT
30yr
LEASE TERM
1.5XCPI
ANNUAL
RENTAL ADJUSTMENTS
NZ$37m
Stage 1
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Wakefield Hospital progress
Underground bulk
excavation, retaining walls
and ground anchors are
well advanced
Base isolators for
earthquake strengthening
are expected to be
installed next month
Live construction update
feed available at:
SITE EXCAVATION AND GROUND WORKS HAVE COMMENCED
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September 2019
October 2019
https://www.wakefield.co.nz/development
/construction-updates
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Epworth Eastern Hospital expansion
New 14 storey tower,
interconnected with the Fund’s
Epworth Eastern Hospital.
Epworth will lease approximately
80% of the expansion
This project will add an
additional 5 operating theatres,
63 beds, an emergency
department and 7 levels of
specialist consulting suites
Expected completion is late
calendar 2021
THE PROJECT WILL MEET THE RISING DEMAND FOR HEALTHCARE SERVICES IN THE CATCHMENT
30yr
LEASE TERM WITH RENTAL
ESCALATORS FOR THE
EPWORTH LEASE
A$126m
Forecast Project Cost
100%
FORECAST OCCUPANCY
~6%
RENTALISATION YIELD
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Value equation from projects
ATTRACTIVE SPREADS
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
Funded by debt at circa 3.0%
Contracted average return of 6.1%
Material to profit and value

Capital Management
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Debt levels
CURRENT GEARING LEVELS REFLECT VITAL’SUNIQUE LONG-TERM STRUCTURED CASH FLOWS IN A DEFENSIVE SECTOR
35.3%
(1)
DEBT / ASSETS
DRP available at 1% discount and no transaction costs
Vital’sdebt is 35.3% on a debt to total assets basis
Vital operates in a defensive sector with unique and
strong demand driversand
A WALT of 18.1 years
Occupancy at 99.4%
High quality healthcare tenants that are performing well
Vital has no peers on either the ASX or NZX, current debt
levels deemed prudent in light of the above factors
Board comfortable with debt levels and headroom
50%
TRUST DEED
COVENANT
(1)Calculated in accordance with Vital’sTrust Deed and excludes A$80.3m related party loan which was repaid on 2 August 2019
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Outlook
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Outlook
32
Vote on new fee structure
Manage effective delivery of $279m projects program
Advance longer dated projects
Capital recycling opportunities
Considering furtheraged care opportunities that add value
Review of distribution guidance at half year
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Questions
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Voting
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
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Resolution One
35
Resolution One: Approval of Trust Deed Amendments
“That for the purposes of s 139(2)(a)(i) of the Financial Markets Conduct Act
2013, the Trust Deed Amendments be approved”
A 75% majority of unitholders who vote is required
NorthWestHealthcare Properties REIT and the directors of the Manager are
restricted from voting
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Resolution One –Proxies Received
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
Vote TypeUnits Voted%of Units Voted% of Total Units
For110,040,03979.80%24.35%
Against8,1340.01%0.00%
Discretionary27,844,44220.19%6.16%
Abstain116,235,869n.a.25.72%

Resolution Two
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Resolution Two: Election of Independent Director
“That Andrew Evans be elected as an Independent Director of
NorthWestHealthcare Properties Management Limited, the manager
of the Vital Healthcare Property Trust”
A simple majority is required
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Resolution Two –Proxies Received
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019
Vote TypeUnits Voted%of Units Voted% of Total Units
For213,626,07785.23%47.27%
Against9,031,3033.60%2.00%
Discretionary27,993,23411.17%6.19%
Abstain3,477,870n.a.0.77%

Close of meeting and thank-you
Please join us for refreshments
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VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

Disclaimer
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This presentation has been prepared by NorthWest Healthcare Properties 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, legal, tax
or financial advice or recommendation to any person 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.
This presentation may contain forward-looking statements. Forward-looking statements can include words such as “expect”, “intend”, “plan”,
“believe”, “continue” or similar words in connection with discussions of future operating or financial performance or conditions. The forward-looking
statements are based on management's and directors’ current expectations and assumptions regarding the Trust’s business, assets and
performance and other future conditions, circumstances and results. As with any projection or forecast, forward-looking statements are inherently
susceptible to uncertainty and to any changes in circumstances. The Trust’s actual results may vary materially from those expressed or implied in
the forward-looking statements. The Manager, the Trust, and its or their directors, employees and/or shareholders have no liability whatsoever to
any person for any loss arising from this presentation or any information supplied in connection with it. The Manager and theTrust are under no
obligation to update this presentation or the information contained in it after it has been released. Past performance is no indication of future
performance.
31
st
October 2019
VITAL HEALTHCARE PROPERTY TRUST| ANNUAL MEETING 2019

---

1
Chair’s Address, Vital Healthcare Property Trust
Annual Meeting, 31 October 2019
The following is the address of the Chair for the Vital Healthcare Property
Trust Annual Meeting held at Level 4 Lounge, South Stand, Eden Park,
Reimers Ave, Mt Eden, Auckland on Thursday 31 November 2019
commencing at 10.30am.
___________________________________
[SLIDE 1]
Welcome ladies and gentlemen to the 2019 Annual Meeting of Vital
Healthcare Property Trust.
My name is Tracey Cross, I have been appointed by the Trust’s Supervisor
to act as the Chair of this meeting. I am independent of the Manager.
The Notice of Annual Meeting has been circulated to all Unitholders. It
sets the scope of what we are scheduled to discuss today and includes the
details of the two resolutions we are due to consider.
I am pleased to confirm that there is a quorum present and I declare the
2019 Annual Meeting of Unitholders of Vital Healthcare Property Trust
open.
___________________________________
[SLIDE 2]
The order for the meeting is as follows:
 I will move to introductions;
 I will then introduce the Chairman of the Manager, Bernard Crotty,
to give his address;
 following the address of the Chairman, Miles Wentworth, Interim
Manager will speak, recapping the Trust’s 2019 results, and also
provide you with an update of activities for the year to date;
 after Miles, we have an opportunity for general business and I will
invite you to ask any questions you may have regarding the Trust
or the presentations. I will ask you to refrain from asking
questions relating to the two resolutions until the appropriate time
in the agenda;

2
 we then move to the formal business being, considering the Trust
Deed amendments and the appointment of Andrew Evans as an
independent director; and
 we will then conclude the meeting, following which there will be
refreshments, and I invite all Unitholders to remain and enjoy
these with us.
The Annual Report and Financial Statements for the year ended 30 June
2019 have been circulated to all Unitholders and are now formally tabled
at the meeting.
Copies of the minutes of last year’s Annual Meeting are available for
inspection at the entrance to the room.
___________________________________
[SLIDE 3]
___________________________________
[SLIDE 4]
Before going any further I would like to take the opportunity to introduce
the Directors of your Trust’s Manager.
To my right is Andrew Evans, to his left is Graham Stuart and to my left is
Bernard Crotty. Due to business commitments, Paul Dalla Lana is not able
to attend today.
___________________________________
[SLIDE 5]
I would also like to introduce:
 Miles Wentworth, who is the Interim Manager appointed on 10
May 2019. Miles is seated to the left of Bernard Crotty; and
 the Chief Financial Officer, Stuart Harrison who is seated next to
Miles Wentworth.
Also present today are:
1. a number of the NorthWest senior executives including Craig
Mitchell the CEO for Australia and New Zealand, Richard Roos,
Executive Director, Portfolio and Chris Adams, Executive Director
Projects;

3
2. Matthew Band, Shahazad Contractor and Justine Wealleans from
Trustees Executors Limited, the Supervisor of Vital Healthcare
Property Trust;
3. Silvio Bruinsma from Deloitte, the auditors of Vital Healthcare
Property Trust; and
4. Toby Sharpe from Bell Gully, the legal advisers to the Manager.

I will now pass you over to Bernard who will run through his presentation.

Address of the Chairman of the Manager
___________________________________
[SLIDE 6]
Thank you Tracy and Good Morning everyone
Although we only get together like this once a year, I’ve been very lucky to
spend a significant portion of my year in New Zealand and Australia and as
such I am very pleased to be here again with you today.
___________________________________
[SLIDE 7]
In my address today, I would like to talk to you about four things:
1. A high level overview of our financial performance
2. A brief recap of the Healthscope opportunity
3. The Fees and Governance review before you today, and
4. Conclude with a wrap-up with an outlook for the coming year
___________________________________
[SLIDE 8]
Firstly, an overview of our financial performance during the 2019 financial
year:
1. Operating performance of the Fund, represented by Normalised Net
Distributable Income was a solid $51.0m, up 3.8% on the prior year
2. Like-for-like net rental growth (on a same currency basis) was 2.3%
due to the highly structured nature of our leases
3. The annual revaluation of the portfolio resulted in a gain of $103.6m,
representing a 6% increase; and

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4. The total return to investors in FY19 was an attractive 27.5%.
So, as you can see, it’s been a strong year.
___________________________________
[SLIDE 9]
And turning to a recap of the Healthscope transaction
1. Last year, Healthscope decided to sell its property portfolio.
2. The Healthscope real estate transaction represented an opportunity
for Vital to jointly acquire with NorthWest an Australian dollar 1.25
billion portfolio of high quality major market hospital assets.
3. After significant consideration of the opportunity it was determined by
Vital’s Board of Directors not to proceed with Vital’s participation in
the Healthscope acquisition.
4. This decision took into account a broad range of considerations –
including Vital’s investment objectives, the proposed structure of the
transaction, Vital’s cost of equity at the time and investor feedback.
___________________________________
[SLIDE 10]
Contemporaneous with the Healthscope transaction and ensuring the
smooth running of the day to day business of the Fund, we have focused
on two specific initiatives over the last 12 months;
1) undertaking a fees review, and
2) reviewing aspects of our governance structure .

[SLIDE 11]
We’re pleased to report that we have made substantial progress on both
of these, of which a major part is the vote today on the Fees and
Governance proposal. You will have received the Notice of Meeting and it
contains considerable detail on the proposed new fee structure. Subject
to today’s vote, the Trust Deed will be amended to reflect the changes to
the fees and also to modernise and eliminate ambiguity.
___________________________________
[SLIDE 12]
This is an important milestone for Vital and I’d like to recap the steps
we’ve taken to arrive at this point:

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1. In November of last year, NorthWest announced that during the first
quarter of calendar 2019 it would review the fees charged to Vital for
management of the assets along with certain aspects of our
governance.
2. That review took place earlier this calendar year and included market
research provided by EY on current market fees charged by specialised
external managers in New Zealand and Australia together with
feedback from investors who own around 40% of the Trust’s units.
3. In early April 2019, the Board announced that they had agreed to a
negotiated outcome with NorthWest to alter its management contract.
The outcome of that negotiation, which is recommended by the
Independent Directors, is Resolution One which is being presented to
you today to vote on.
___________________________________
[SLIDE 13]
A review undertaken by independent accountants, Deloitte, based on
the 2018 and 2019 financial accounts found lower fees would have
been paid under the proposed new structure versus the current one.
Accordingly, the proposed structured would have resulted in:
a. Higher earnings of $2.5m and $2.1m in FY2018 and FY2019,
respectively, and
b. No change to the Fund’s NTA in either FY2018 or FY2019.
___________________________________
[SLIDE 14]
The proposed fee changes, if implemented, would be expected to have
the following effects:
a. Lower base management fee
b. A tiered base management fee
c. Fees for value adding activity and services at market rates; and
d. An incentive fee based on changes in Net Tangible Assets (rather
than on Gross Assets as it currently stands). There would be a
three year high-water mark which means the incentive fee
would only be paid on an increase in Net Tangible Assets over
the its highest point in the previous three years. This will
enhance the alignment of the Manager’s incentive
compensation with unitholder’s bottom line growth in net value

6
We believe these changes are positive for Unit Holders and set the
platform for the Trust’s next stage of growth benefiting all
stakeholders in the medium to long-term.
___________________________________
[SLIDE 15]
Along with the focus we’ve applied to fees and governance we have
ensured an orderly transition to a few key roles within our team whilst
maintaining our focus on the business
1. We were pleased to recently announce the appointment of Aaron
Hockly as Vital’s new Fund Manager. Aaron will be working out of our
Auckland office. He is a New Zealand national and a highly experienced
property executive. He has worked in senior management roles for the
last 17 years, and will be supported by the broader NorthWest team in
the region. Aaron’s most recent role was as Chief Operating Officer of
the $4.1 billion ASX listed Growthpoint Properties Fund. As such we
are very fortunate to have attracted someone of Aaron’s calibre to
assist taking Vital forward in its next phase.
2. Secondly, Stuart Harrison, who has been Vital’s CFO for 12 years
announced his retirement in August but will remain with us until our
interim results are released in February 2020 in order to provide a
smooth transition to Michael Groth. I would like to personally thank
Stuart for his dedicated and exceptional service to Vital over many
years.
3. We are pleased to have Michael Groth, here with us today who will be
stepping into the CFO role at Vital.
4. Michael was formerly the Group CFO with APN Property Group, an ASX
listed real estate investment manager with A$2.8bn under
management. Some of you may recall APN was the joint venture
partner in the Manager of Generation Healthcare, the Australian
Healthcare listed property vehicle founded by Miles Wentworth and
Chris Adams who are with us today as members of the NorthWest
team.
I want to take this opportunity to extend my thanks to Miles. Since
NorthWest purchased Generation Healthcare in 2017, Miles has been a
director and advisor of NorthWest in Australia. In April this year, he came
out of “semi-retirement” to lead Vital through the recent initiatives until a
permanent Fund Manager was identified and appointed.
Miles has brought strong leadership and energy to Vital.

7
And there’s no doubt that the recent support Vital has received from
all stakeholders – our institutional and retail investors, our lenders, our
tenants, and the entire NorthWest team – is a testament to his
reputation in the sector, his hard work and his enthusiasm for
healthcare property. We appreciate Miles’ intention to remain on the
scene for the next couple of months to ensure there is a smooth
handover to Aaron.

[SLIDE 16]
Finally, I’d like to provide you an update to our search for an additional
independent director
1. In September of this year we announced:
a. We would bring on an additional independent director to the
Board by the end of calendar 2019. That will bring the number of
independent directors on the Board to three and NorthWest will
continue to have two director representatives, and
b. We would be appointing an independent Board Chair by the
2020 Annual Meeting.
2. I want to give you an update today on that search process. The
external recruitment firm that is assisting in the search process has
provided a list of candidates. The search is progressing well and we
look forward to completing that process before the end of the year
consistent with the above announcement.
___________________________________
[SLIDE 17]
I’d now like to discuss a project that we’ve been working on.
We are considering a foreign exempt listing on the Australian Stock
Exchange with the primary listing to remain on the NZX. This is being
considered in order to access deeper and broader pools of capital, drive
our cost of equity lower and provide access to value adding funding for
future growth

If the Board decides to pursue this initiative, approval from Unitholders
will be required with a 75% majority required. Any vote would be
expected to occur late in the first or second quarter of calendar 2020.

8
We are in the early stages of reviewing this proposal and expect to
provide a further update to you by the end of the year.
___________________________________
[SLIDE 18]
To wrap-up:
1 The business has produced strong financial results and delivered a
27.5% total return to unitholders
2 We are pleased to be able to bring a package of fee and governance
enhancements for you to vote on today.
5. At the 2019 Annual Result, the Board reaffirmed a 2020 financial year
distribution per unit of at least 8.75 cents per unit. We will review the
level of distribution at the interim results in February taking into
account the outcome of today’s fee change vote.
6. Aaron Hockly has been appointed as the new Fund Manager to lead
Vital and formally starts with us in December.
7. The search for a new independent director is well advanced and is
expected to be completed prior to the end of this calendar year as
announced.
8. We are investigating an ASX foreign exempt listing while maintaining a
primary listing on the NZX. We believe this would strengthen the
Fund’s long-term future and has the potential to bring significant
benefit to unitholders. We will provide further updates as the process
unfolds.
Thank-you for your time and now I will pass you to Miles for his
presentation.

Address of the Interim Manager
___________________________________
[SLIDE 19]
Thank you Bernie and good morning everyone
It’s great to see such a strong turnout to today’s 2019 Annual Meeting, so
thank you all for making the effort to come along
_________________________________
[SLIDE 20]
In my address today, I would like to talk to you about:

9
1. The 2019 financial results
2. The performance of the property portfolio
3. I’ll provide you with an update on our two major projects being
Wakefield in Wellington and Epworth Eastern in Melbourne
4. Give you a brief overview of the Fund’s Capital Management
programme
5. Then lastly, provide an Outlook for the Fund
___________________________________
[SLIDE 21]
Firstly to the Financial Highlights
1. With the highly structured rent review profile of the Fund, we again
delivered attractive like-for-like net rental growth (on a same
currency basis) of 2.3%
2. The “Normalised” Net Distributable Income (which is prior to non-
recurring and abnormal items) was $51 million, a 3.8% increase
3. The Net Tangible Asset backing was up 2% to $2.31, driven by
further strong growth in the overall value of the portfolio
4. Debt to Total Assets, excluding the Healthscope related party loan
that was repaid in early August, was down to 35.3% from 37.5% in
the prior year
5. Following the announcement of the fourth quarter distribution, the
total distribution for the 2019 financial year was 8.75 cents per unit,
an increase of 2.2% from the prior year
6. Your total return for the year to 30 June, being the change in the
unit price plus distributions, was a significant 27.5%.
___________________________________
[SLIDE 22]
Looking now at the Property Portfolio. We have also seen strong growth
continuing here
1. All of the properties within the Fund were independently valued at 30
June. In total, the values were up 6.0% or $104 million. This reflects
the weight of capital and appetite by investors for quality healthcare
property;
2. 77% of the gain came from the Australian properties, being slightly
more than the proportion of those assets within the Fund
3. The team renewed 32 leases during the year with positive spreads to
the prior rental

10
4. Lease expiries in the next 2 years primarily reflect small tenancies at
multi tenanted properties and we have a high expectation that these
leases will be renewed
5. Our portfolio continues to have a long and attractive weighted
average lease term of 18.1 years; and
6. We’re continuing to see occupancy of over 99%, in fact occupancy was
99.4% at 30 June
___________________________________
[SLIDE 23]
Now for an update on our projects
___________________________________
[SLIDE 24]
We currently have 279 million dollars worth of “return on cost” projects
that have recently started.
What I mean by Return on Cost, is that we contractually agree a
percentage return with our tenant and then this percentage is applied to
whatever the project costs. That is, if the cost goes up from what was
budgeted, then so does our rent and vice versa.
Chris Adams, Executive Director Projects and his team of development
managers are responsible for these projects in coordination with our
leasing team. There are 5 projects that make up the pipeline with two
representing the majority of the spend. One of these is in Wellington
being the Wakefield Hospital, and the other is in Melbourne at our
Epworth Eastern campus.
___________________________________
[SLIDE 25]
As many of you know, Wakefield Hospital is Wellington’s pre-eminent
private hospital. It has an enviable reputation and unique catchment given
Wellington’s topography. The site is an operating hospital and as such we
need to minimise disruption. This project will be delivered in three stages
with an estimated total cost to Vital of $98 million. The stages will be
sequenced to best suit ongoing operations.
Given Wellington’s susceptibility to earthquakes, alongside our tenant
partner we are jointly investing a significant amount into the buildings
structural integrity. This is to ensure that it can sustain the shakes that

11
may come its way in the future and making it one of the safest hospitals in
the country.
Wakefield will offer patients from central New Zealand some of the most
advanced medical services and treatment in the country. On completion
the hospital will include 64 inpatient beds, eight operating theatres,
consulting suites and specialist services including cardiac and endoscopy.
Earlier this year we ran a formal tender process involving three qualified
parties and appointed Hawkins Construction as the lead contractor on the
first stage of the project.
___________________________________
[SLIDE 26]
The first stage has a 37 million dollar build cost, and construction began in
July of this year. Currently the site is undergoing bulk excavation with
retaining walls and ground anchors well advanced. Following testing of the
prototype base isolators, for the earthquake strengthening,
manufacturing has commenced and installation is expected to begin next
month.
This project is 100% pre-committed by Acurity Health Group, a high
quality hospital operator, on a 30 year lease, generating a 6.30% return on
what it costs us and subject to annual rent reviews of 1.5 x the annual
Consumer Price Index. We expect this first stage to be completed in early
2021.
The remaining two stages are in the advanced planning phases and we
expect to provide updated timing as they become more definitive
however the final stage is currently expected to be completed by 2023.
___________________________________
[SLIDE 27]
The second major project is at the Epworth Eastern campus where we
have started the next phase, which is a 126 million Australian dollar, 14
level tower project. This is the largest project in the Trust’s history.
80% of the net lettable area has been pre-let to Epworth Healthcare which
is Victoria’s largest not for profit hospital operator. This space is subject
to a 5.95% return on cost, a 30 year lease and fixed rent reviews of 3% per
annum.
For the remaining 20%, we have strong expressions of interest for more
space than we actually have available, particularly from doctors for

12
consulting space given they are having to move out of the Trust’s adjacent
medical centre to make way for an Accident and Emergency department
for Epworth.
This project will add an additional 5 operating theatres, 63 inpatient beds,
an emergency department, 7 levels of specialist consulting suites and 66
carparks.
The project will further enhance one of Vital’s prime assets and, on
completion, the Eastern campus will have a value approximating 350
million Australian dollars.
___________________________________
[SLIDE 28]
The Wakefield and Epworth Eastern projects are being fully debt funded
by our banking partners ANZ and Bank of New Zealand. With an all in cost
of approximately 3% and a blended contracted return of 6.1%, these
projects will add materially to Vital’s profits and value in the next few
years.
___________________________________
[SLIDE 29]
Moving now to Capital Management
___________________________________
[SLIDE 30]
The Fund has a solid balance sheet with the Distribution Reinvestment
Plan active, allowing investors to reinvest their distribution at a 1%
discount to the market price and no transaction costs.
Following the repayment of the NorthWest loan in early August, the debt
to total assets ratio was 35.3%. With the projects being debt funded and
assuming no appreciation in the value of the portfolio or asset sales, the
Fund’s debt is expected to increase to approximately 42% of assets.
Is this debt level a little too high? The directors and management think
not, given what the funds are being used for and I’ll explain why. Vital is
invested exclusively into a sector with the unique defensive characteristics
of an ageing and growing population, as well as technology generating
more and more health solutions. Our portfolio has a weighted average
lease term to expiry of 18.1 years and an occupancy of 99.4%. These
factors all contribute to an extremely high quality portfolio of assets with
cash flows that can be reliably forecast over the long term. We therefore

13
see the debt level as being prudent, noting it is a balance between having
a lazy balance sheet and an over geared one.
___________________________________
[SLIDE 31]
Now concluding with the Outlook for the Fund
___________________________________
[SLIDE 32]
Shortly you will have the opportunity to vote on a new fee structure for
the Manager. If approved, it will deliver material upside value to
investors.
On the operational side a key focus during the 2020 financial year will be
to manage the effective delivery of the project program I have set out for
you this morning.
We have a number of longer dated projects such as Ormiston in South
Auckland and Elizabeth Vale in Adelaide for which we will continue to
advance the master planning and associated feasibility studies.
Active consideration is being given to capital recycling opportunities
within the Fund. This means that we are considering the sale of some
smaller and lower value properties where value has been maximised. The
funds released will be reinvested with a view to further enhancing the
quality of the portfolio.
And we are actively looking at further opportunities in the aged care
sector – an industry with a large scale property component and which
shows many similar characteristics to our existing portfolio. While we
consider there are strong synergies, any investment opportunities will be
carefully and thoroughly evaluated against our value adding assessment
framework.
And lastly, looking ahead, the Board has reaffirmed a 2020 financial year
distribution of at least 8.75 cents per unit. As Bernie mentioned the Board
will review this guidance at the half year.
Ladies and Gentlemen, thank you very much for your time today and for
your continued and valued support of Vital Healthcare Property Trust.
I will now hand back to the Chair of today’s meeting.

14
___________________________________
[SLIDE 33]
If there are any questions relating to the Trust or the presentations now is
the opportunity to do so.

Thank you for your questions and comments.
___________________________________
[SLIDE 34]
Ladies and gentlemen, I would now like to move to the formal business of
the Meeting. We have two formal resolutions to vote on today. The first
relates to amending the Trust Deed and the second to the appointment of
an independent director. I propose to deal with them in the order set out
in your Notice of Meeting.
Each vote will be conducted by poll and, as we go, we will put the details
of proxies received up on the screen. To allow those who want to have
their say to do so, and in the interests of fairness to all Unitholders
attending this Meeting, I ask that anyone wishing to speak should be as
concise as possible and considerate to other Unitholders wishing to also
ask questions.
Unitholders have the right to speak once on each resolution and I would
be grateful if you could limit your questions or comments to the
resolution being considered at that time.
When I open up for questions, please raise your hand and a microphone
will be handed to you. If you could then please state your name and
whether you are a Unitholder or a Proxy holder. Please note that only
Unitholders or Proxy holders are permitted to speak at this meeting.
___________________________________
[SLIDE 35]

The first resolution relates to the Trust Deed amendments. A detailed
summary of the Trust Deed amendments is contained in the Notice of
Meeting.

The first resolution will be passed by special resolution at the meeting. A
special resolution means a resolution passed by unitholders with a

15
combined value of not less than 75% of the value of the units held by
those persons who are entitled to vote and voting on the resolution.

Subject to the first resolution being passed by the requisite majority, it is
proposed that the Trust Deed Amendments are effected by the Supervisor
and the Manager signing a Deed of Amendment.

As described in the Notice of Meeting, the Trust Deed Amendments
include amendments required to be made for consistency with the new
NZX Listing Rules introduced by NZX on 1 January 2019. If Unitholders do
not approve the Trust Deed Amendments at this meeting, the Manager
will still need to arrange for the Trust Deed to be amended such that
those amendments required by the New Listing Rules are made. If the
Supervisor is satisfied that those amendments do not have a material
adverse effect on Unitholders, the Supervisor may approve them without
a Unitholder vote.

Because the Trust Deed Amendments include changes to management
fees and governance rights, the Manager is directly interested in the
outcome of the first resolution. As a result, it will not vote on this
resolution, as required by the Financial Markets Conduct Act.

Now is your opportunity to ask questions relating to the first resolution.
Let’s make a start with ....

Thank you for your questions and comments. We should now move on to
voting on the Trust Deed amendments.
___________________________________
[SLIDE 36]

The details of the proxies received on this resolution are on the screen
behind me.

If I am appointed as proxy to vote and not directed on how to vote, I will
vote in favour of this resolution.

Please can I ask you now to cast your vote by clearly ticking the box on the
voting form you wish to reflect your vote.

If you do not have a voting paper with you, please raise your hand.

16
___________________________________
[SLIDE 37]
The second resolution relates to the appointment of an Independent
Director. Vital’s Trust Deed provides that unitholders may select two
persons for appointment as two Independent Directors to the board of
the manager by unitholders. One of those two positions is voted on each
year. Mr Stuart was appointed last year, and this year Mr Evans is
standing for appointment by unitholders as an Independent Director.
No nominations for Independent Directors were received by the
Manager this year prior to the closing date for nominations and,
as a result, no other person is eligible to be elected as an
Independent Director at the annual meeting.
As the number of persons eligible for election is equal to the
number of Independent Directors who may be elected at the
annual meeting, if more votes are received in favour of Mr
Evans’s election than against then he will be elected as an
Independent Director pursuant to clause 30.8 of the Trust Deed.
I would like to invite Andy to address the meeting.

Thank you Andy.

Now is your opportunity to ask questions relating to the second
resolution. Let’s make a start with ....

Thank you for your questions and comments. We should now move on to
voting on Andrew Evans.
___________________________________
[SLIDE 38]

The details of the proxies received on this resolution are on the screen
behind me. If I am appointed as proxy to vote and not directed on how to
vote, I will vote in favour of this resolution.

Please can I ask you now to cast your vote by clearly ticking the box on the
voting form you wish to reflect your vote and once completed please hand

17
your form to the representatives of the Manager or Computershare
moving around the room.
___________________________________
[SLIDE 39]
This now concludes the formal business of the meeting.
Thank you ladies and gentlemen. I appreciate your contribution to today’s
meeting.
Once the votes have been completed and the result of the polls are
available, the outcomes will be notified to the Supervisor and Manager of
the Trust and released to the NZX following verification by Computershare
and Deloitte.
Please join us for some refreshments and feel free to take the opportunity
to talk to directors and management. I now declare the meeting closed.
___________________________________
[SLIDE 40]