Property revaluations of $244 million were a big driver of bottom-line profit growth for listed Australasian medical landlord Vital Healthcare Property Trust, which made $303m annual net profit after tax, up on the previous year's $278m.
In the year to June 30, 2022, the trust recorded property revaluations of $244m,up on last year's $235m.
Revenue rose from $113m to $127m. Expenses were also up, from $30m to $37m when the Canadian-headquartered manager took a much larger fee.
Unitholders will get 9.6 cents per unit distribution, up 8 per cent on last year.
Vital owns healthcare properties here and in Australia: private hospitals, aged care facilities, medical specialists and outpatient buildings. It is the only business of its type to be listed but specialising in the niche medical buildings market where tenants often stay much longer than in other types of properties.
That's because the fit-out of these buildings is usually far more complicated and expensive than other types of commercial property.
Vital is the only specialist listed landlord of healthcare property in Australasia and has a portfolio valued at more than $3.3b, it says. Last year, the portfolio stood at $2.6b, so it's risen 27 per cent annually.
Manager - NorthWest Healthcare Properties Management - is a subsidiary of the Toronto Stock Exchange listed NorthWest Healthcare Properties REIT, a global owner and manager of healthcare property.
NorthWest said the distribution increase was underpinned by strong growth in earnings and recent asset acquisitions and development activity.
Auckland-based fund manager Aaron Hockly said Vital's board and management expected to deliver further earnings and distribution growth in the current trading year.
Last month, Vital's manager flagged $85m property revaluation gains anticipated for the second half of its full year.
All up, Vital is planning $1.8b of potential development work here and in Australia.
Today, Hockly said Vital was doing an additional $146m of new development work. That included expanding Auckland's Ormiston Hospital, Tauranga's Grace Hospital, additions to Wellington's Wakefield Hospital and working on Adelaide's Playford Health Hub.
At March, Vital owned 44 properties valued at $3.2b, 98 per cent was occupied and it had a 17.6 weighted average lease expiry term, which is the longest in the listed property sector in New Zealand.
Plans for Vital's Adelaide project. Photo / supplied
In the last decade, Vital has delivered a total return - unit price rise plus dividends - of 13 per cent per annum, it said. This outperformed the NZX REIT index by 4 per cent.
Vital's gearing is 30 per cent, reduced lately when it raised further new capital.
The business plans to expand its Ascot Hospital and Ascot Central around the Greenlane/Epsom areas.
NorthWest's manager's fee rose from $13m last year to $15.7m this year. In addition, the manager's incentive fee rose from $12m to $15.9m, meaning NorthWest earned more than $30m from managing the NZX listed entity.
All up, expenses which included management and management incentive fees rose from $30m to $37m, the annual report out today showed.
Shares have been trading around $2.81, down from $3.30 in March.
