Vital Healthcare Property (NZX:VHP) Outperformed, Recorded a total return of 12.7%

Summary

  • Vital Healthcare Property Trust recorded a total return of 12.7% for one-year period to 30 September 2020.
  • VHP outperformed the S&P/NZX All Real Estate Index by 17.1% over the same period.
  • Despite the ongoing COVID-19, Vital Healthcare collected more than 99% of the rent for FY20 and Q1 FY21.

NorthWest Healthcare Properties Management Limited, the manager of Vital Healthcare Property Trust (NZX:VHP) updated the presentation at today’s (17 November) annual meeting of unitholders. Vital Healthcare Property Trust recorded a total return of 12.7% for the one- year period to 30 September 2020.

It is noteworthy to mention that, over the same period, the Group outperformed the S&P/NZX All Real Estate Index by 17.1%. This substantial outperformance of VHP highlights the defensive nature of healthcare real estate as compared to other real estate companies.

On 17 November 2020, at the time of writing, Vital Healthcare shares were trading at NZ$3.0 up by 1.01% on the NZX. The Company’s market capitalisation stood at NZ$1.01 billion.

Let us dive deep and discuss Vital Healthcare in detail-

Vital Healthcare’s outperformance on a total return basis

In the annual meeting presentation, released on 17 November 2020, Vital Healthcare disclosed that it had outperformed against the S&P/NZX All Real Estate Index since inception.

For the one year to 30 September 2020, Vital Healthcare recorded 12.7% total return versus the benchmark S&P/NZX All Real Estate Index, which recorded a drop of 4.3%. This signifies a 17.1% outperformance by Vital Healthcare Property Trust as compared with its peers.

Quick highlights from the annual meeting presentation-

Highlights from the Financials

  • During FY20, Vital Healthcare witnessed almost 5.6% rise in AFFO per unit.
  • The Group disclosed distribution guidance of at least 8.75 cpu for FY21.
  • Vital Healthcare reduced its equity raising gearing to ~33%.
  • Moreover, Vital Healthcare is targeting 2-3% AFFO and distribution growth per unit per annum.

Highlights from the Operation

  • Despite COVID-19, Vital Healthcare collected more than 99% of the rent for FY20 and Q1 FY21.
  • In the financial year 2020, acquisitions of almost NZ$71.3 million completed.
  • Vital Healthcare notified that its nine developments and almost NZ$100 million of asset sales are underway.  
  • Almost NZ$95 million premium hospital acquisition is underway.

Vital Healthcare’s Significant Progress During Q1FY21

Vital Healthcare updated the market with its progress during the first quarter of FY21 (period ended 30 September 2020) on 10 November 2020.

Vital Healthcare highlighted that it's ~NZ$250 million development pipeline is underway with significant progress recorded during the first quarter of FY21 in both New Zealand and Australia.   

Additionally, the Group notified that ~NZ$100 million of new brownfield developments were disclosed after Q1FY21 end, including-

  • Expansion and upgrade of Belmont Private Hospital (A$22.6 million).
  • Expansion of Abbotsford Private Hospital (A$18.6 million).
  • Stage one development of a new health precinct in Adelaide to be known as Playford Health Hub (A$21.7 million).

Moreover, these developments shall be partially funded by the equity raising of almost NZ$157.5 million undertaken in October and November 2020.

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