VITAL HEALTHCARE PROPERTY TRUST HY23 interim results presentation
Defensive sector and strategy continues to deliver for Unit Holders
23 FEBRUARY 2023
Contents
Delivery of core business strategies | 3 |
Overview of Vital | 4 |
HY23 highlights | 8 |
Financial results & capital management | 11 |
Portfolio | 17 |
Developments | 21 |
Future focus | 26 |
Appendices | 28 |
Presenters
Aaron Hockly
Fund Manager
Michael Groth
Chief Financial Officer
Richard Roos
Exec. Director, Portfolio
Chris Adams
Exec. Director, Projects
All amounts are in NZD unless otherwise shown | VITAL HEALTHCARE PROPERTY TRUST | INTERIM RESULTS 2023 | 2 |
Delivery of core business strategies
DURING HY23, THE MANAGER CONTINUED TO DELIVER ON ITS STRATEGIES TO ADD VALUE FOR UNIT HOLDERS
High-quality healthcare real estate portfolio anchored by private hospitals.
Increase exposure to green buildings.
Growing AFFO and distributions by 2-3% per unit per annum over the medium term
17.2 Year WALE; 78% hospital exposure | Three major developments targeting at | |
least 5-Star Green Star underway | ||
2.6% growth in distributions per unit for HY23 from p.c.p. on a 85% payout ratio
Continue to grow earnings. | Limit earnings risk | Best practice governance | ||
3.7% like-for-like net property income growth over HY23
67% of drawn debt hedged for 2.9 years (pro forma at 31/12/22)
All relevant principles of NZX Corporate Governance Code met
Increase exposure to core and emerging | Development pipeline appropriately funded | On-going sustainability enhancement | ||
healthcare precincts | ||||
28% of portfolio in core healthcare precincts; | ~NZ$200m of asset sales underway; NZ$250m | Second place globally for listed healthcare | ||
to increase through developments and disposals | (pro-forma) of debt headroom available1 | in global real estate benchmark (GRESB) | ||
1 Subsequent to 31 December 2022, Vital has accepted credit approved offers from lenders to increase facility limits by A$100m and extend the | |
duration to 4.2 years, with no expiry until 2025. The credit approved offers are subject to customary terms associated with credit approved offers, | VITAL HEALTHCARE PROPERTY TRUST | INTERIM RESULTS 2023 | 3 |
and documentation is progressing. Closing, subject to customary conditions, is scheduled to be finalised in March 2023 |
Overview of Vital
VITAL IS THE ONLY SPECIALIST HEALTHCARE LANDLORD LISTED ON THE NZX
NORTHERN
TERRITORY
WESTERN
AUSTRALIA
SOUTH
4AUSTRALIA
3
~NZ$2.5bn
31* PROPERTIES (AUS)
QUEENSLAND
6
NEW SOUTH
WALES
12
VICTORIA
6
TASMANIA
17.2 year | ~ NZ$3.5bn | |
WALE | 47* PROPERTIES | |
(AUS & NZ) | ||
14
2
~NZ$1.0bn
16* PROPERTIES (NZ)
VITAL HEALTHCARE PROPERTY TRUST (VITAL) IS:
The owner of a ~NZ$3.5 billion healthcare property portfolio in New Zealand (30% of assets) and Australia (70%);
Externally managed by a subsidiary of Toronto-listed, global healthcare real estate owner and manager, Northwest Healthcare Properties REIT (TSX ticker: NWH);
Underpinned by rental income that tracks inflation with ~81% of lease income indexed to CPI in some way; and
Targeting 2-3% AFFO and DPU growth per annum over the medium term, whilst retaining a conservative payout ratio.
*Excludes strategic assets held for development
VITAL HEALTHCARE PROPERTY TRUST | INTERIM RESULTS 2023 | 4
Short, medium and longer term enhancements1
PORTFOLIO ENHANCEMENTS SUPPORT TARGET OF GROWING AFFO AND DISTRIBUTIONS BY 2-3% PER UNIT PER ANNUM
TOTAL PROPERTY VALUE
~ NZ$0.62bn | ~NZ$1.93bn | ~NZ$3.5bn | |||
(AUS: 72%, | (AUS: 75%, | (AUS: 70%, | |||
NZ: 28%) | NZ: 25%) | NZ: 30%) | |||
2012 | 2019 | 2022 | |||
465%
growth (HY13-HY23)
DEVELOPMENT PIPELINE
~NZ$60m NZ$266m NZ$2.4bn3 | ||
2012 | 2019 | 2022 |
Enhance earnings and valuation growth and support portfolio quality
WALE | AVERAGE BUILDING AGE2 | |||||||||||||||||
12.1 years | 17.9 years | 17.2 years | Data not | 14.0 years | 11.1 years | |||||||||||||
available | ||||||||||||||||||
2012 | 2019 | 2022 | ||||||||||||||||
2012 | 2019 | 2022 | ||||||||||||||||
Market leading WALE | Younger buildings reduce | |||||||||||||||||
maintenance capex requirements | ||||||||||||||||||
LARGEST SINGLE TENANT EXPOSURE | SECTOR SPLIT | |||||||||||||||||
40% | 48% | 18% | Hospital 90%, | Hospital 86%, | Hospital 78%, | |||||||||||||
Ambulatory Care | Ambulatory Care | Ambulatory Care | ||||||||||||||||
2012 | 2019 | 2022 | 10%, | 11%, | 18%, | |||||||||||||
Aged Care 0% | Aged Care 3% | Aged Care 4% | ||||||||||||||||
2012 | 2019 | 2022 | ||||||||||||||||
Concentration risk reduced | Diversity of assets reduces |
risk and enhances earnings | |
NET PROPERTY INCOME (HALF YEAR)
$28m | $50m | $72m |
HY13 | HY20 | HY23 |
157%
increase (HY13-HY23)
WEIGHTED AVERAGE CAP RATE
9.30% | 5.52% | 4.72% |
2012 | 2019 | 2022 |
Healthcare now considered a core real estate investment
1 All date references are to 31 December of that year unless otherwise stated | |
2 Average building age = the later of the date of construction or the last significant capital | works |
3 Committed and potential development pipeline | VITAL HEALTHCARE PROPERTY TRUST | INTERIM RESULTS 2023 | 5 |
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Disclaimer
Vital Healthcare Property Trust published this content on 22 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 February 2023 23:20:03 UTC.
