Listed ING Medical Properties Trust profit improved to $6.76 million before tax in the six months to December, up from the $2.86 million loss it reported the same time the previous year.The healthcare building owner's portfolio includes Ascot Central and
Listed ING Medical Properties Trust profit improved to $6.76 million before tax in the six months to December, up from the $2.86 million loss it reported the same time the previous year.
The healthcare building owner’s portfolio includes Ascot Central and Ascot Hospital at Auckland, Eastmed at St Heliers and Melbourne investments including Epworth Eastern Campus.
Its occupancy rate is now 99%, up 2.5% from the same time last year.
“The strong interim result is a reflection of the clearly articulated direction and delivery of the Trust’s strategy over recent years,” the trust said, adding that its performance showed a “clear investment appetite” for differentiated real estate investment product.
While the commercial property sector has been suffering with vacancy rates rising, property valuations and rental rates falling, the healthcare and medical sector have been strong.
Its return to unitholders was higher than the average listed property company, with a 12 month total return of 18.5%, above from the NZX Gross Property Index total return of 12.9%.
In the six months to December is earned $12.36 million from rent, up 4.9% from $11.76 million the same time the previous year.
Like most companies with property investments, the trust is wary of tax changes to be announced in the Budget in May, which would include abolishing depreciation.
“It is possible that denying depreciation on medical and healthcare property assets could impact on all private sector investment in healthcare infrastructure in New Zealand,” the trust said.
“As a result we may see increased margins and thresholds for investment returns in order to offset the net tax cost, which unfortunately would likely be passed through to the healthcare sector operators and ultimately their patients and clients.”
The trust expects it can cope with any negative effects that could occur as an “ongoing economic or financial market hangover” from the recession, helped by an average weighted lease expiry term of 8.5 years.
“The strength of the tenant covenants, consistent rental growth, low risk lease expiry profile and overall portfolio diversification are key facets of the Trust’s future underlying stability.”
At press time its shares were trading at $1.21 each.
