Secure cash flow turns loss into profit for ING Medical Properties Trust

ING Medical Properties Trust general manager David Carr. Photo / Martin Sykes

New Zealand's only listed specialist medical and healthcare property business is in better shape, its boss saying three hard years are behind it.

ING Medical Properties Trust's annual result out yesterday turned last year's $2.2 million loss into a $7.4 million profit.

"We've had a pretty tough three years but now we are getting some very secure cash flows," said David Carr, general manager of ING Medical Properties.

The trust's real estate is worth more now than it was a year ago, up from $286 million to $292 million.

Ascot Hospital and Clinics at Greenlane, the trust's most valuable asset, was worth $82 million last year but $84.7 million by June 30, 2010, according to Colliers International's valuation.

ING (NZ) says the medical trust and its other larger more general property vehicle, ING Property Trust, will not come under the OnePath brand but adopt their own independent brands.

"This recognises the specialist nature of the trusts' investments and operations and the unique requirements that are associated with being listed on the NZX," ING said. A rebrand for the two ING real estate trusts is due any day.

Jason Lindsay at First NZ Capital said the result was in line with expectations. Modestly higher rental and interest expenses were due to currency differences between here and Australia.

Next year's dividend would drop to the 8cpu-8.2cpu range, making the trust the final listed property vehicle to cut its dividend, he said.

"In summary, a good result but expected. Hard to see significant growth from here. Continues to look expensive versus peers and I wonder if a signalled cut in dividend may spook some smaller investors who might have thought the dividend was sustainable. We reiterate our under-perform rating," Lindsay wrote.

Carr said Ascot was 97 per cent leased, the portfolio occupancy was 99.6 per cent and that had been a key in achieving the full-year cash distribution of 8.5cpu, the third year in a row unitholders got this amount.

"It is clear that the trust and unitholders have benefited from investment in a sector where properties are tightly held and tenant demand is less influenced by market and economic factors," Carr said.

The trust owns large medical properties at Melbourne's Box Hill and Brighton, Eastmed in St Heliers which had been partly empty but which is now 95.3 per cent leased, and health centres in Whangaparaoa, Albany, Auckland and Napier.

Units closed steady at $1.25.