Capital recycling and indicative valuation changes

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by Northwest Healthcare
Properties Management Limited
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26 June 2024
Non-core asset sales, development update and indicative valuation changes to
30 June 2024
Northwest Healthcare Properties Management Limited (the Manager), the manager of
Vital Healthcare Property Trust (Vital), is pleased to provide this update on Vital’s capital
recycling and development programme as well as indicative updated valuations.
Notably:
1. NZ$87m of non-core asset sales have been contracted since April 2024 at a 2%
discount to book value.
2. Practical completion has been reached at three developments since April 2024
(81% leased).
3. Vital has ~NZ$150m remaining to spend on its committed development pipeline
across seven developments which is able to be fully funded from existing debt
capacity.
4. Indicative valuations show a modest <1% decline over the half year ending 30 June
2024 reflecting the high-quality nature of Vital’s portfolio. This equates to <2 cent
per unit decline in NTA since 31 March 2024
1
.
Vital’s Fund Manager, Aaron Hockly, said:
“Vital continues to deliver in line with our announced strategy. We have sold or
contracted to sell over NZ$300m of non-core assets since March 2023 and have
~NZ$180m of potential sales being considered that will complete our capital
recycling programme and maintain prudent, ‘through the cycle’, balance sheet
gearing at or below 40% as planned. Repaying debt from the proceeds of asset
sales has resulted in Vital’s remaining committed development pipeline being fully
funded from its existing debt headroom.
Recycling capital from non-core assets into new developments has, and will
continue to, improve the quality and resilience of Vital’s portfolio. This is expected
to enhance Unit Holder returns over the medium term.”
Non-core asset sales update
Unconditional contracts have been exchanged to sell five assets for total consideration of
NZ$87m comprising three Bolton Clarke aged care assets and a Hobart development site
in Australia and the Napier Medical Centre in New Zealand. These assets were contracted


1
Indicative only and subject to finalisation of accounts, movements in exchange rates and interest rates as
well as audit and final board approval.

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by Northwest Healthcare
Properties Management Limited
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at an aggregate 98% of their 31 December 2023 book values (excluding selling costs).
Settlements are due to occur by 30 June 2024.
In addition, a further ~NZ$180m of assets are being considered for potential sale as Vital
concludes it capital recycling program.
Development update
Practical completion has recently been achieved for ~NZ$150m of developments
comprising:
1. Macarthur Health Precinct (Stage 1), Campbelltown. Practical completion was
reached in April 2024. This development comprises ~2,700 square metres of net
lettable area, is 100% leased and is on track to achieve a 6- Star Green Star rating
(as built).
2. P
layford Health Hub (Stage 2), Adelaide. Practical completion was reached in June
2024. This development comprises ~8,700 square metres of net lettable area, is
~60% leased and is on track to achieve a 6- Star Green Star rating (as built).
3. O
rmiston Hospital (Stage 1), Auckland. Practical completion is expected to be
reached in June 2024 to double the size of this Southern Cross majority occupied
hospital to ~9,000 square metres of net lettable area. The property is 94% leased.

In addition, Vital’s contribution to the complete redevelopment of Wakefield Hospital has
reached the agreed cap of NZ$91.5m with the balance of the works to be funded by the
tenant. Rent has been commencing in line with Vital’s actual spend and practical
completion is expected to be split into two phases with the first in late 2024 and the
second in 2025.
Indicative valuation changes to 30 June 2024
~60% of Vital’s portfolio (by value) will be fully independently valued (the balance having
had desktop valuations undertaken by independent valuers) at 30 June 2024.
Indicatively, the weighted average capitalisation rate is expected to be ~5.30%, reflecting
~5.16% for the Australian portfolio and ~5.61% for the New Zealand portfolio. This results in a
forecast unrealised reduction, after taking into account rent reviews and development
returns, in net property values for the 6 months ending 30 June 2024 of less than 1%
2
.
The indicative revaluation is subject to final valuations being received, audit and final
board approval which will be confirmed when Vital's FY24 results are released (expected
to occur on 8 August 2024).
Balance sheet gearing at 30 June 2024 is expected to be maintained at or below 40%
2
, in
line with Vital’s prudent ‘through the cycle’ target.

– ENDS –





2
Indicative only and subject to finalisation of accounts, movements in exchange rates and interest rates as
well as audit and final board approval.

VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by Northwest Healthcare
Properties Management Limited
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For further information, please contact:
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 (~83%* of portfolio value), ambulatory
care facilities (~17%* of portfolio value) and aged care (~0%* 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
* All figures are indicative, as at 30 June 2024 reflecting sales noted in this announcement.