Vital Healthcare to buy hospitals from Acurity for $68m in development partnership

Vital acquires Acurity's Wakefield and Bowen private hospitals in Wellington in this partnership.

Vital Healthcare Property Trust has entered a conditional agreement with Acurity Health Group to become its long-term real estate capital partner, helping redevelopment and grow Acurity's portfolio of private hospitals in New Zealand.

The first stage of this partnership would see Vital acquire Acurity's Wakefield and Bowen private hospitals in Wellington for about $68 million. That is subject to certain pre-settlement conditions being satisfied, including Overseas Investment Office and development project approvals, Vital Healthcare said in a statement. Projects including a significant redevelopment of Wakefield in Newtown, Wellington, are likely to be in the order of $100 million, it said.

"With agreed lease terms of 30 years, a long-term partnership with Acurity at these established private hospitals is a rare and unique opportunity for Vital and strongly aligns with our scale and diversification strategy," said chief executive David Carr.

Separately the company said Vital unitholders will receive a third quarter distribution of 2.125 cents per unit with 0.0628 cents per unit of imputation credits.

In its third-quarter update, Vital said its net property income in the nine months ended March 31 was $69.8 million, up from $50.1 million in the same period a year earlier. Profit attributable to unit holders of the trust was $83.45 million, up from $69.35 million in the prior period. Total assets stood at $1.23 billion versus $978 million in the nine months to March 2016.

The units rose 0.2 percent at $2.225 and have gained about 11 percent over the past year.