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Vital Healthcare gets a new manager, Aaron Hockly

Thursday 24th October 2019

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NorthWest Healthcare Properties REIT has appointed a new manager of its NZX-listed Vital Healthcare Property Trust to replace David Carr, who left the company in May.

Aaron Hockly, who has lived in Australia for 17 years and held a number of senior management and advisory roles there, will take over from interim manager Miles Wentworth in early January.

Hockly will be based in Auckland and will report to Canada-based NorthWest's Australasian chief executive Craig Mitchell.

"We are very pleased that, after a lengthy executive search, we have been successful in attracting a senior real estate executive with Aaron's experience and understanding of both the New Zealand and Australian property markets," Mitchell says in a statement.

Vital, which owns health and medical-related property, has about 76 percent of its $1.8 billion portfolio by value located in Australia and the balance in New Zealand. Vital's market capitalisation is $1.23 billion. The units last traded at $2.73, up 30.6 percent so far this year.

Hockly's most recent role was as chief operating officer for Growthpoint Properties Australia, an ASX-listed property trust that invests in office and industrial properties and has a market capitalisation of A$3.3 billion.

"At Growthpoint, Mr Hockly had direct management responsibility for strategy, transaction structuring and execution – property, debt and equity – reporting and investor relations," NorthWest says.

Wentworth, who managed Vital when it was called Callan Healthcare Properties Trust for 10 years until 2006, "will work closely with Mr Hockly to ensure a seamless transition and a continuation of the current management focus before resuming his role as a director and adviser to NorthWest."

NorthWest owns Vital's management contract and nearly 25 percent of its units.

Carr's departure coincided with the decision that Vital wouldn't buy into Australian health properties that NorthWest acquired earlier this year for A$1.26 billion at a weighted average capitalisation rate of 5 percent.

Vital's cost of capital then was about 6 percent and the possibility that NorthWest might force Vital to pay over the odds for the properties stirred up considerable investor unrest, both over the purchase and over how much NorthWest was extracting from Vital in fees.

Northwest has collected more than $125 million in gross fees from Vital since it bought the management contract in 2011 for $11.5 million.

Investors will vote at the annual meeting on Oct. 31 on a new fee structure that will reduce both the management and incentive fees and will make explicit a number of other fees.

NorthWest has said that had the new structure been in place, Vital would have paid $980,000 less in fees in the year ended June and $1.9 million less in the 2018 financial year.


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