Vital Healthcare buys Sydney hospital, land for $A23.5m

It's betting demand for its properties will grow with an ageing population and increased demand for healthcare.

Vital Healthcare Property Trust bought a rehabilitation hospital and adjacent land in Sydney for A$23.5 million, continuing its expansion of healthcare properties.

The Auckland-based company bought Hirondelle Private Hospital, a rehabilitation centre in the central Sydney suburb of Chatswood, and two adjacent residential sites with an option to acquire a third property for future expansion to meet forecast rising demand for rehabilitation services in the area, it said in a statement.

The hospital and healthcare property developer and investor has been expanding and diversifying its portfolio since it raised $160 million in a rights issue last year. It's betting demand for its properties will grow with an ageing population and increased demand for healthcare.

"The acquisition fits perfectly with Vital's strategy to continue to support the growth initiatives of its partners," said chief executive David Carr. "Furthermore it aligns with our scale and diversification strategy to enhance long-term value and underpin the delivery of sustainable distributions to investors."

Hirondelle will be leased to the existing tenant Healthe Care, Australia's third-largest corporate private hospital operator, for 25 years with an initial yield of 6 percent, Vital said. The purchase was settled yesterday, it said.

Vital Healthcare's shares last traded at $2.24, and have gained 11 percent this year.

(BusinessDesk)