Vital Healthcare Property Trust expects to meet the conditions attached to buying two private hospitals in Wellington from Acurity Health Group in the "next few months", says chair Graeme Horsley.
The healthcare property investor signed a conditional deal with Acurity in May of this year, agreeing to buy the Wakefield and Bowen hospitals for $68 million, redevelop them for some $100 million, and enter into 30-year leases with the private hospital operator. That deal was subject to certain conditions being met, including securing Overseas Investment Office approval.
"Whilst those conditions have not yet been satisfied I am advised that we certainly hope to be able to confirm such in the next few months," Horsley today told shareholders at their annual meeting in Auckland. "Both Wakefield and Bowen will be leased to Acurity for initial lease terms of 30 years, reflecting the long-term intent of both parties, including Vital partnering with Acurity as its exclusive real estate capital partner on future opportunities."
The Wakefield development will be the bigger of the two, with Vital expecting to spend about $80 million between 2018 and 2021 whereas the work at Bowen to introduce necessary infrastructure for radiation oncology services would take about 12 months, starting in the first half of next year.
Vital's board declared a first-quarter dividend of 2.125 cents per unit, payable on Dec. 18 and affirmed annual guidance for a cash distribution of 8.5 cents in 2018.
The property investor reported an 11 percent increase in net profit to $14 million in the three months ended Sept. 31, buoyed by a 13 percent gain in net property income to $20.8 million. An $8.7 million gain in the value of Vital's property portfolio offset unrealised losses in foreign exchange. Vital's $1.47 billion property portfolio included $37.2 million of acquisitions in the quarter and $6.8 million of development.
Vital units increased 0.5 percent to $2.215, having gained 9.2 percent so far this year.
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