HeathCo REIT bedding down portfolio

21 February 2022

The HealthCo REIT has been relatively quiet in recent months as it bed’s down its recent acquisitions and focuses on its delivery pipeline.

The REIT has grown from 27 properties at its IPO to around 40 worth $668m.

HCW Senior Portfolio Manager, Sam Morris said, “We are excited to deliver a strong result following the listing in Sep-21 with HCW’s high quality and diversified portfolio delivering against our core objective to provide unitholders with consistent and growing distributions.”

“We are making good progress unlocking the significant growth opportunity embedded in our development pipeline which will transform the scale and quality of the portfolio on completion. Construction of the 78 bed paediatric hospital at Camden is running over 4 weeks ahead of schedule and our EOI process for Stage 2 generated strong interest from leading national private hospital operators.”

Financial highlights

  • 1H FY22 FFO of $5.8m (1.8 cpu)
  • Net cash position of $56m provides funding capacity for value accretive development pipeline
  • NTA/unit of $1.94 versus $1.86 at IPO (+4.3%) driven by property revaluations
  • 98% occupancy versus 96% at IPO
  • 100% cash rent collections since IPO

Growth highlights

  • ~$200m high quality healthcare assets acquired at 5.02% WACR with 17.1 year WALE
  • ~$140m committed development projects remain on budget and are tracking ahead of schedule
  • Future development pipeline includes Stage 2 (private hospital) of the Camden Precinct with EOIs received from leading national private hospital operators (estimated end value >$250m)

FY22 guidance

  • Reaffirming FY22 FFO guidance of 5.0 cpu which was upgraded in Oct-21
  • Reaffirming PDS FY22 DPU guidance of 7.4 cents

HCW Chief Financial Officer, Christian Soberg said, “HCW is well capitalised with an undergeared balance sheet and strong liquidity to fund its exciting growth pipeline. Since listing HCW has collected 100% of cash rent which is a testament to our portfolio strategy which is designed to provide strong downside protection via subsector, tenant and geographic diversification. We are pleased to reaffirm our upgraded FY22 FFO and PDS FY22 DPU guidance”.