Hospital delivers a healthy return

A 61 per cent after-tax profit increase by Calan Healthcare Properties Trust was yesterday attributed to its new Melbourne hospital which contributed a large slice of the rental revenue rise.

Chairman Bruce Davidson and chief executive Miles Wentworth said total operating revenue was up 36 per cent, from $7 million to $9.5 million for the half year - $2.2 million coming from Epworth Eastern Campus, which has leased 90 per cent of the new hospital.

They said Calan's new Epworth hospital had been described as Australia's most advanced private hospital and a 20-year lease to the Epworth Foundation would help to stabilise returns. It had a 99.3 per cent occupancy rate, up from 99.1, and the weighted average lease term was 11.14 years, up from 9.3 years.

They took issue with takeover predator ING Property Trust, saying Calan's specialisation in the healthcare property sector was what gave it the best results.

"This excellent result further reinforces the advice given to unit holders that they should take no action on the takeover offer made by ING until they are in receipt of all relevant information," they said.

"The increase in revenue underlines the value to unit holders of Calan being a specialist investor in the health sector and the health property expertise that resides in our management team."

ING said Calan investors would be better to accept the takeover offer because they would get more diversity and a broader spread of investment in other real estate sectors.

Calan units closed down 3c to $1.24 yesterday. Unitholders expect an independent appraisal of ING's takeover offer on Monday.