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Vital Healthcare pays A$13m for Mayo hospital in Australia

Monday 19th December 2011 2 Comments

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Vital Healthcare Property Trust has paid A$13 million for the Mayo Private Hospital and Healthcare Centre in Taree, New South Wales, its manager said.

The yield after acquisition costs is about 10% and the purchase will be funded from the trust's existing bank facility, it said.

The property, which is about 170 kilometres north of Newcastle, has a 61 bed private hospital, two operating theatres, associated specialist consulting rooms and a rehabilitation centre.

“Built in 1997, it is a modern, highly functional hospital and healthcare centre,” the manager said. The site has existing development consents, allowing for expansion.

The purchase was made in association with Healthe Care Australia which has bought the Mayo operating business and signed a 20 year lease with annual CPI-linked reviews. The purchase will increase the trust's weighted average least term to about 11.5 years from 11 years.

“We are pleased to have been able to work closely with Healthe Care again on an opportunity that is beneficial to both parties, seeing another quality asset added to the trust's portfolio,” said David Carr, chief executive of Vital Healthcare Management.

Vital Healthcare already owns about eight properties leased to Healthe Care.

Earlier this month, ANZ Bank sold the trust's management contract and its 9 percent stake in the trust to Canada's NorthWest Value Partners for $11.5 million.

Vital Healthcare units closed at $1.05 on Friday. The units have risen from as low as $1.02 early this year but have dropped from $1.20 in early November when it was announced NorthWest had acquired a 10 percent stake.


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Comments from our readers

On 19 December 2011 at 12:07 pm Unhappy Camper said:
The share price of VHP was $1.54 before ING/OnePath/ANZ took over the management 5 years ago. It was $1.34 a year ago just before they destroyed tens of millions of dollars of unitholders' funds buying Australian real estate (increasing their fees in the process). Unit price now $1.05! Will the Canadians be able to continue this stellar performance?
On 19 December 2011 at 2:20 pm Vital Investor said:
Well, they are keeping the same staff, chairman and directors so they should, in theory, be able to keep up their 'stellar' performance. I went to the AGM and I was left with a very bad feeling about the new Canadian owners. I suspect we suspect we will see fees, fees and more fees. I would be surprised now if we ever see the reduction in fees that OnePath and ANZ promised but then renenged on. :-(
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