Strategic initiatives to further enhance returns

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by NorthWest Healthcare
Properties Management Limited
Page 1 of 5

MARKET RELEASE
6 January 2023
Strategic initiatives to further enhance returns to Unit Holders
NorthWest Healthcare Properties Management Limited (the Manager), the manager of
Vital Healthcare Property Trust (Vital), has commenced a process to further enhance its
portfolio consistent with its previously announced strategies around precincts, asset
weightings and green buildings, by strategically recycling capital. This process includes:
1. The sale of ~$200m of existing non-core assets.
2. Delay of the development pipeline (committed and potential), including the
proposed A$98.6m Tasman Medical Centre fund-through pending the outcome of
a procurement review.
3. Development of a new ~A$1 40m 6- Star Green Star, life sciences centre of
excellence building in the heart of the Gold Coast Health and Knowledge Precinct.
Vital's Fund Manager, Aaron Hockly, said:
"We have reviewed all of Vital's existing assets as well as current and proposed
developments to ensure Vital continues to deliver for Unit Holders. The proposed
asset sales and the adjustments to Vital's development pipeline are intended to
further improve the age, diversity, quality and resilience of the portfolio. In
particular, the changes will further increase Vital's portfolio weighting to newer, high
green credentialled buildings in key health precincts.
The changes will also help achieve the Manager's target of having 10-15% of the
portfolio's value under development at any one time."
Proposed asset sales
An ongoing review of Vital's portfolio has identified ~$200m of assets that are considered
non-core. As a result, a targeted sales process has commenced.
Net sale proceeds will initially be used to repay debt reducing balance sheet gearing by
~2.5%
1
and would be expected to be broadly neutral to Vital's AFFO. The exact impact
will depend on pricing achieved, timing of settlement and debt costs at the time of any
repayment.
The Manager will periodically update the market on its proposed sales programme.



1
A ssuming sales occur at or around indicative 31 December 2022 book values.

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by NorthWest Healthcare
Properties Management Limited


Vital's first life sciences investment
The Manager has agreed terms for Vital to develop a new state of the art, 6-Star Green
Star health, research and innovation building to be known as "RDX".
RDX is strategically located in the heart of the Gold Coast Health and Knowledge Lumina
Precinct; Queensland’s largest emerging health and innovation hub, accommodating
Griffith University (~20k students) and Gold Coast University Hospital (912 beds). RDX is
master planned to be inter-connected to the Gold Coast Private Hospital (320 beds;
operated by Healthscope) via a bridge link. This precinct has been supported by ~A$5bn
of recent infrastructure investment including a new rail link as well as residential and retail
development.
Gold Coast Health and Knowledge Precinct:

Construction is expected to commence early 2023 and complete early/mid 2025. Costs
are expected to total ~A$140m.
Icon has been appointed as lead contractor for this development pursuant to a fixed
price design and construct contract. Icon is a tier 1 building contractor in Australia and a
subsidiary of Kajima, one of the oldest and largest construction companies in Japan.
The Manager is very pleased to have secured this prime development opportunity for
Vital. RDX is expected to be a leading research and innovation hub incorporating
neuroendovascular radiology and interventional cardiology innovation and training. RDX
is core to Vital's precinct strategy and exhibits the key attributes for precinct success.
Gold Coast Hospital and Health Board Chairman Ian Langdon said;
“I don’t think you can name anywhere else in Australia at the moment where
there’s such an opportunity, an area of land adjacent to a hospital and adjacent
to a major university”.

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by NorthWest Healthcare
Properties Management Limited


Key details are noted in the table below:
Total projected development cost ~A$140m
Development margin ~ 12%
Indicative construction period Early 2023 - mid 2025
Yield on cost 5.6% (fully leased)
Leasing enquiry (to date) ~78% of the net lettable area with 14
separate potential occupiers
Green Star target 6-Star Green Star
Land area 2,467 sqm
Gross floor area 14,509 sqm
Car parking 181 bays
Expected Uses • Neuroendovascular radiology and
interventional cardiology innovation
and training
• Rehabilitation inpatient and
outpatient clinical services
• Human clinical trials
• Research and virtual care
• Other health, education and
research related uses

The flexible building design enables initial or future use for overnight beds and overnight
clinical trial facilities. The large floor plates at nearly 1,900sqm also support a range of uses.
RDX is Vital's first significant life sciences investment. After the asset sales noted above,
Vital's exposure to life sciences is expected to increase from 0% to ~5% of its total portfolio
(by value).
RDX is proposed to be 6-Star Green Star, in comparison to the properties Vital proposes to
sell from its portfolio, which do not currently have, nor are likely to be able to achieve in
the future, any major environmental certifications. A key part of Vital's strategy is to
increase environmental certifications across its portfolio, which is intended to deliver
higher total returns for Unit Holders over the longer term. RDX complements other market-
leading, environmentally focused initiatives in the portfolio including Playford Health Hub
in South Australia and Macarthur Health Precinct in New South Wales.

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by NorthWest Healthcare
Properties Management Limited



Artist's impression of RDX:

Balance sheet impact
Including the RDX development announced today, Vital has ~$390m of spend remaining
to complete its committed development and fund through pipeline. Of this, ~$150m is
forecast to be spent over the balance of FY23. The proposed asset sales and other
measures including Vital's DRP and conservative payout ratio are expected to ensure
balance sheet gearing does not exceed 40% over the medium term.
As at 31 December 2022, Vital had ~NZ$140m of debt head room available and a
weighted average debt term of 3.38 years. A process is currently underway to extend
both of these with details expected to be announced as part of Vital's interim results in
February 2023. Also at 31 December 2022, ~70% of Vital's drawn debt was fixed for a
weighted average term of 2.9 years.
NorthWest Involvement
The RDX opportunity was initially secured by NorthWest Healthcare Australia (NorthWest
Australia), which is a related party of the Manager. NorthWest Australia developed the
RDX opportunity such that it now aligns with the Manager’s strategy for Vital, as described
above. NorthWest Australia will nominate Vital to acquire the underlying land from the
Minister of Economic Development Queensland and will transfer the relationship with Icon
to Vital. Vital will also assume NorthWest Australia’s obligations under certain tenancy
re lationships. An independent valuation has been obtained for the underlying property to
help ensure that Vital will step into the RDX opportunity on arms' length terms.
– ENDS –

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by NorthWest Healthcare
Properties Management Limited


ENQUIRIES
Aaron Hockly
Fund Manager, Vital Healthcare Property Trust
Tel 09 973 7301, Email aaron.hockly@nwhreit.com
Michael Groth
Chief Financial Officer, NorthWest Healthcare Properties Management Limited
Tel +61 409 936 104, Email michael.groth@nwhreit.com
About Vital (NZX code VHP):
Vital Healthcare Property Trust is an NZX-listed fund that invests in high-quality healthcare
properties in New Zealand and Australia including private hospitals (~79%* of portfolio
value), ambulatory care facilities (~17%* of portfolio value) and aged care (~4%* of
portfolio value).
Vital is the leading specialist listed landlord of healthcare property in Australasia.
Vital is managed by NorthWest Healthcare Properties Management Limited, a subsidiary
of Toronto Stock Exchange listed NorthWest Healthcare Properties REIT, a global owner
and manager of healthcare property.
For more information, visit our website: www.vhpt.co.nz
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* All figures are indicative, as at 31 December 2022