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Vital expands footprint with hospital buys

NZN 26/02/2017 Paul McBeth

Vital Healthcare Property Trust has continued its acquisition spree since last year's capital raising, buying hospitals in Perth and Auckland.

The healthcare property developer and investor on Monday announced the purchases of a 30-bed private mental health hospital in Perth for A$20 million and a 31-bed private surgical hospital in Auckland for $33 million. The two purchases are expected to deliver an average yield of 6.65 per cent, it said.

The Abbotsford Private Hospital in Perth has an initial 25-year lease term with Healthe Care Australia as the tenant, expanding the relationship that spans several properties, and is Vital's second private hospital acquisition in Western Australia, which chief executive David Carr said "has the highest proportion of private health insurance in Australia". The deal settled on February 24.

The Ormiston Hospital in Flat Bush south of Auckland's CBD is the only private surgical hospital in the Counties Manukau District Health Board catchment. Vital's acquisition is expected to settle in May, and the property investor plans to buy a further 1,000 square metres of adjacent land to provide for future growth.

Vital last week reported an 87 per cent increase in first-half distributable earnings to $35.5m as acquisitions and developments drove rental growth.

The medical property investor raised $160m last year, and since then has already bought two medical office buildings in Sydney and Melbourne for A$55m, completed an A$18.3m brownfields development at South Eastern Private Hospital and Dubbo Private Hospital and also has five other development projects, for about A$63m, underway.

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