Vital announces third quarter results

VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD, THIRD QUARTER UPDATE 2021
INCREASE IN
AFFO PER UNIT
14.6%
9 MONTHS Y.T.D.
NTA
$2.63
PER UNIT
Dear Unitholders,
NorthWest Healthcare Properties Management Limited (NorthWest), as
manager of the Vital Healthcare Property Trust (Vital), is pleased to provide
this update as at 31 March 2021.

Performance
Vital recorded an 11.7% increase in net property income for the three months
ended 31 March 2021 (Q3FY21) and a 9.6% increase financial year to
date from the prior corresponding periods reflecting acquisitions,
developments and rental growth. This increase in net property income helped
Vital record a 14.6% increase in adjusted funds from operations or AFFO per
unit for the financial year to date.
Over Q3FY21, Vital recorded a 3.1% increase in net tangible assets per unit.
This increase reflects the valuation gains referred to below and favourable
foreign exchange movements as the New Zealand dollar weakened versus
the Australian dollar. As noted below, the property valuation increases do not
reflect independent valuations which will be undertaken at 30 June 2021.
Consistent with FMA guidance, we are not publishing total return
performance for the 12 months ended 31 March 2021. We expect to
release total return performance for the 12 months ended 30 June 2021 later
this year.

Portfolio
Vital’s portfolio of quality healthcare real estate was valued at $2.36 billion at
31 March 2021; up from $2.25 billion at 31 December 2020, a 4.8%
increase. This ~$100m increase reflects $33.7m of acquisitions, $30.0m of
development expenditures, $30.6m in favourable foreign exchange
movements and $10.9m in revaluation gains from rent increases and
development rent commencing. Consistent with prior practice for Q3
reporting, no movements in market capitalisation rates (cap rates) were
recorded in the directors’ valuations adopted. Any update to cap rates for
movements in the wider Australasian property market will be reflected when
Vital’s properties are valued at 30 June 2021.
In excess of 34,000 square metres of leasing was undertaken during
Q3FY21 across both the existing portfolio (18,588 square metres) and
developments (15,586 square metres) helping to maintain Vital’s long
weighted average lease expiry term of 18.9 years and occupancy at over
99% (both as at 31 March 2021).
Despite COVID-19, over 99% of rent was collected over Q3FY21 as well as
over the last 12 months demonstrating the resilience of healthcare operators
and assets.

Third Quarter Update
1 January – 31 March 2021
Development
All eight current committed developments, totalling $346.9m, remain
substantially on-time and on budget other than the scope and cost for
Wakefield Hospital which was revised earlier in the year with details released
to the market in February 2021.
Stage 1 of the $112.8m redevelopment of Wakefield Hospital is due to
complete in May 2021 with an official opening scheduled for late June.
Construction for the remaining parts of the project is expected to commence
in late 2021.
The $11m expansion and upgrade of Royston Hospital reached practical
completion in Q3FY21. The development of an adjoining day surgery
remains on track for completion in October 2021.
Development of a new A$9.9m oncology centre at South Eastern Private
Hospital completed during Q3FY21.

New Zealand health system
Finally, the New Zealand government has also announced a proposal to
consolidate the 20 existing district health boards into a single agency, Health
New Zealand. It is currently unclear what impact, if any, this may have on
Vital but we applaud any attempts to improve public health systems in New
Zealand and Australia. We echo the hopes of one of our key operating
partners, Southern Cross, that the private sector will be part of securing a
healthier future for New Zealanders. We have capital, your capital, available
to invest in health facilities across New Zealand and Australia to help address
our widely acknowledged infrastructure deficit.

Thank you for your on-going support for Vital.
Aaron Hockly, Fund
Manager
12 May 2021

VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD, THIRD QUARTER UPDATE 2021
Q3 UPDATE
LIKE-FOR-LIKE FINANCIAL PERFORMANCE (UNAUDITED)
For the period
3 months to
31 Mar 21
$000s
3 months to
31 Mar 20
$000s
Variance
$000s
Change
%
Gross property income26,72026,524
Property expenses(3,135)(3,259)
Like-for-like net property income23,58523,2653201.4%
Net property income from acquisitions2,133-
Net property income from disposals51,318
Net property income from developments1,553206
Straight-line rent(520)(213)
Non-recurring items18783
Foreign exchange606-
Net property income27,54924,6592,89011.7%
FINANCIAL POSITION (UNAUDITED)
As at
31 Mar 21
$000s
31 Dec 20
$000s
Variance
$000s
Change
%
Assets
Investment properties2,355,2462,248,398106,8484.8%
Other assets20,65917,542
Liabilities
Borrowings805,913734,93870,9759.7%
Other liabilities207,977217,628
Debt to gross assets33.9%32.4%1.5%
Total unitholders' funds1,362,0151,313,37448,6413.7%
Units on issue (000s)517,954515,649
Net tangible assets ($/unit)2.632.550.083.1%
Period end NZD/AUD exchange rate0.91860.9356


“Vital's property portfolio was valued at
$2.36 billion as at 31 March 2021;
4.8% above 31 December 2020
reflecting rent increases, acquisitions,
developments and forex movements.”

We are excited to announce the launch of our refreshed and fully updated website. Check it out at www.vhpt.co.nz.

VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD, THIRD QUARTER UPDATE 2021
YEAR-TO-DATE UPDATE
YEAR-TO-DATE FINANCIAL PERFORMANCE (UNAUDITED)
For the period
9 months to
31 Mar 21
$000s
9 months to
31 Mar 20
$000s
Variance
$000s
Change
%
Gross property income94,37385,581
Property expenses(12,664)(11,024)
Net property income81,70974,5577,1529.6%
Corporate expenses(4,041)(3,331)
Strategic transaction income and expenses-(7,947)
Strategic transaction interest income-267
Management fees (base & incentive)(15,498)(14,059)
Net finance expenses(20,017)(21,154)
Operating profit42,15328,33313,82048.8%
Non-operating gains/(losses)
Fair value gain/(loss) on investment property71,60150,588
Net gain/(loss) on disposal of investment property11,310-
Fair value gain/(loss) on derivatives20,812(12,297)
Realised & unrealised gain/(loss) on foreign exchange(1,929)2,010
Profit/(Loss) before income tax143,94768,63475,313109.7%
Current and deferred taxation(18,761)(11,722)
Profit/(Loss) for the period attributable to unitholders of the Trust125,18656,91268,274120.0%
Funds from Operations (FFO)43,91934,9648,95525.6%
Adjusted Funds from Operations (AFFO)42,87434,3908,48424.7%
AFFO per unit8.737.621.1114.6%
Weighted average units on issue (000s)491,190451,02240,1688.9%
Average NZD/AUD exchange rate0.93140.9513
Royston Hospital Day Surgery Unit, Hawkes Bay (artist's impression of development on completion)

VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD, THIRD QUARTER UPDATE 2021
DEVELOPMENT UPDATE
DevelopmentDevelopment work being undertaken
Development
cost
Spend
to date
Forecast
completion
date
AUSTRALIAN(A$m)(A$m)
Epworth Eastern Hospital (VIC)
New 14 storey tower incorporating 5 operating theatres, 60 beds, 6
levels of consulting and refurbishment of the existing medical centre
126.268.4Early-22
Belmont Private Hospital (QLD)
48 new inpatient beds, 13 private practice consulting suites and 70
new car parks
22.61.2Late-22
Playford Health Hub Stage 1 (SA)Multi-deck car park (circa 450 spaces) & ground floor retail20.74.5Late-21
Abbotsford Private Hospital (WA)47 beds, parking, therapy rooms and admin - planning approved18.62.3Mid-22
Eden Rehabilitation (QLD)
New 26 bed mental health ward, rehab unit and refurbishment of
existing wards
12.42.4Early-22
Total Australian Developments200.678.7
NEW ZEALAND(NZ$m)(NZ$m)
Wakefield Hospital, WellingtonStaged demolition and redevelopment of entire hospital112.855.4
Staged
21-23
Royston Hospital DSU, Hawke's BayNew standalone two theatre Day Surgery Unit8.14.1Late-21
Boulcott Private Hospital, Wellington
Two new theatres, PACU expansion and conversion of double rooms
to singles
7.70.0Mid-22
Total New Zealand Developments128.559.5
Total Developments in $NZD
1
346.9145.2
1 A$ converted at 31 March 2021 spot rate 0.9186
“Vital’s committed development pipeline of $346.9m, together with the potential
pipeline of $560m being actively progressed, are expected to continue to
enhance returns for Vital’s unitholders over the medium term.”
Important note: The information in this investor update is general information only and does not contain all information necessary to make an investment
decision. The financial information in this investor update has not been audited. No representation or warranty, express or implied, is made to the
accuracy, adequacy or reliability of information in this update, including the financial information. This investor update contains forward looking
statements which are inherently susceptible to uncertainty. Vital’s actual results may vary materially from those expressed or implied in this investor
update. The Manager is under no obligation to provide any update the information included in this update, including as a result of the audit process.
Q3
Distribution
Payment date
24 June 2021
Ex date
9 June 2021
vhpt.co.nz
CASH
DISTRIBUTION
2.25
CPU
DISTRIBUTION
2.9%
ABOVE
P.C.P.
ANNUALISED
DISTRIBUTION
9.00
CPU
IMPUTATION CREDITS
0.5676
DRP ACTIVE
YES
DRP
DISCOUNT
1%
VITAL HEALTHCARE PROPERTY TRUST, MANAGED BY NORTHWEST HEALTHCARE PROPERTIES MANAGEMENT LTD, THIRD QUARTER UPDATE 2021