Vital Healthcare Property Trust said on Friday a preliminary unaudited revaluation had increased the value of its portfolio by $165.4 million for the 12 months ending this Friday, 30 June.
For the previous 12 months, Vital made a $101.9 million portfolio gain.
The portfolio value is expected to be $1.37 billion when year-end figures are confirmed.
Management company chief executive David Carr said: “Vital is now realising the benefits of the strong execution of our scale & diversification strategy for many years. Over the last 24 months we have observed healthcare real estate capitalisation rates firm faster than the wider market.
“We consider this firming a mainly structural shift as the market’s appreciation of the unique characteristics & underlying drivers of healthcare real estate is now evident. These attractive market characteristics are amplified by Vital’s leading portfolio metrics, including a weighted average lese term to expiry of about 17.5 years and occupancy levels sustained at over 99% for 8 years.
“This structural shift has been underpinned by multiple new entrants looking to secure opportunities in the sector. Whilst they have been successful at the fringes, we continue to prudently execute on a number of recent off-market acquisitions, reflecting the strength of relationships Vital has with both existing & new partners. We expect to participate in further market consolidation over time, which will continue to drive our strategy forward.”
- Like-for-like (excluding acquisitions) portfolio revaluation increase of 17%
- Australian portfolio revaluation gain of $144.4 million
- New Zealand portfolio revaluation gain of $21 million
- Australian weighted average cap rate firmed 120 basis points to 6.03%
- New Zealand’s weighted average cap rate firmed 84 basis points to 6.09%
- Whole portfolio weighted average cap rate firmed 113 basis points to 6.04%
Mr Carr said about 90% of the increase had been cap rate firming, rental growth the balance. Overall, Vital’s investment portfolio value at 30 June 2017 is forecast to be about $1.37 billion.
By itself, the revaluation gain is expected to add about 28c/unit to Vital’s net tangible asset value at 30 June (at 31 March it was $1.79).
The valuations remain subject to Vital’s year-end audit & exchange rate. These will be confirmed in the financial results, to be announced in August.
Attribution: Company release.