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Vital Healthcare pays A$12.3m for Sydney hospital

Tuesday 1st May 2012

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Vital Healthcare Property Trust has paid A$12.3 million to buy the Hurstville private hospital in Sydney, its manager said.

The 79-bed, four-operating theatre hospital with associated specialist consulting rooms will provide the trust with an initial yield of about 10 percent after acquisition costs and the purchase will be funding from the trust's existing bank facility, it said.

The purchase, like other of the trust's recent acquisitions, was made in association with Healthe Care Australia which has bought the hospital's operating business while Vital bought the land and buildings. Vital Healthcare now owns about 10 properties leased to Healthe Care.

Healthe Care will sign a new 20-year lease with inflation-linked annual reviews and this will increase the trust's weighted average lease term to 11.5 years from 11.2 years previously.

The site has the capacity to expand the hospital and the manager plans further development as demand for healthcare services in the area increases.

In December, 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 fell 0.8 percent to $1.24 in morning trading, just below yesterday's year high at $1.26. They had dropped as low as $1.085 in December after the NorthWest announced it had bought 10 percent.

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