ING Medical happy with Govt outsource surgery push

ING Medical Properties Trust says the move to outsource surgery by the District Health Boards is good news. Photo / Dean Purcell.

ING Medical Properties Trust sees underlying support for its operations from a Government "push" for district health boards to outsource elective surgical contracts to the private sector.

ING Medical Properties general manager David Carr told the trust's annual meeting in Auckland today that the move was great news, particularly for its hospital tenants.

"This also potentially signals a devolution of services by the Government, so we are staying close to any developments in this area and remain in regular contact with the Ministry of Health policy team."

Carr said the trust had secured three further tenants in the past few weeks, taking its occupancy levels to 98.4 per cent.

A key improvement has been at Ascot Central in Auckland, where the trust now has lease commitments for 86 per cent of the building, having just secured another medical tenant for 250sq m.

The trust has stable rental growth, a low risk lease expiry profile, long weighted average lease term, sound tenant covenants, high occupancy levels and quality assets, said Carr.

That should see it relatively insulated through any continuing volatility in local and global markets, at a time when pressure in commercial property markets generally was on declining rentals and increasing vacancies and lease incentives.

In the 2009 financial year, the trust paid a full year cash distribution of 8.5c per unit. Barring material unforeseen economic or portfolio events, it is forecasting a full year 2010 cash distribution range of 8.4cpu to 8.6cpu, with a target of 8.5cpu.

The value of the trust's portfolio declined 2.4 per cent to be worth $286.2 million at June 30.

- NZPA