Ann: ASSET: VHP: Vital settles residential aged care acquisitions

• Release Date: 02/03/16 17:24
• Summary: ASSET: VHP: Vital settles residential aged care acquisitions
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					VHP
02/03/2016 17:24
ASSET
NOT PRICE SENSITIVE
REL: 1724 HRS Vital Healthcare Property Trust

ASSET: VHP: Vital settles residential aged care acquisitions

Vital settles residential aged care acquisitions

Further to the announcement of 25 February 2016, Vital Healthcare Property
Trust ('Vital') has now settled the acquisition of four residential aged care
assets in Australia. The properties will be leased for 20 years to the Hall &
Prior Health and Aged Care Group ('Hall & Prior'), one of Australia's leading
private residential aged care operators.

David Carr, Chief Executive Officer of Vital's manager said "As initially
detailed in our Interim Results release last week it's great to announce we
have settled the strategic investment of four aged care properties and
confirm our relationship with Hall & Prior, which presents an exciting next
phase in Vital's evolution."

About Hall & Prior
Hall & Prior was established in 1992 and is a private Australian Commonwealth
Government approved residential aged care provider. With more than 1,450 aged
care beds it is one of the largest private residential aged care operators in
Australia. Hall & Prior currently manages 22 facilities, with primary
concentrations in metropolitan Perth and metropolitan Sydney.

Hall & Prior's Western Australia division has 900 residential aged care beds
and 1,200 staff. The New South Wales division has 550 residential beds and
over 400 staff.  Six senior executives are supported by a management team of
50 personnel, all of whom have a strong focus on high quality care, including
dementia care for many residents.

Mr Carr said "Hall & Prior have more than 20 years' experience in residential
aged care and are market leaders in the provision of quality care for the
elderly. We expect this new relationship to generate a pipeline of brownfield
development and follow-on acquisition opportunities. This will further
improve scale and drive enhanced long-term performance, much like the
value-add capital expansion programme we have delivered very well on over the
last six years."

Graeme Prior, Hall & Prior's Managing Director said "After considering a real
estate capital partner for some time, we see Vital as one of the most capable
and respected healthcare real estate investors in Australia. We were
particularly attracted to Vital's track record in supporting brownfield
development and other growth opportunities with their partners.  Further
capital investment at each of these four properties will provide both parties
with attractive incremental operational and investment returns in well
located metropolitan locations.

Australia's aged care sector is under real pressure to increase supply to
meet the demands of an expanding and ageing population. Our care facilities
provide need-based care, and while there has been relative stability in aged
care operational funding, there has been significant under-investment in the
industry for many years. We see our relationship with Vital as critical to
supporting our growth initiatives to meet that demand, which may include
consolidation of small scale operators, supplemented with both brownfield and
greenfield development initiatives."

Acquisition properties summary
Below is a summary of each property acquired.

Property:      Hamersley;    Rockingham;   Clover Lea;
Fairfield
Residential Aged Care; Residential Aged Care;  Residential Aged Care;
Residential Aged Care
Purchase Price (A$): $10.6m $5.6m $10.7m $14.1m
Asset / care description:  Two level, 78 bed high-care facility; Single
level, 40 bed high-care facility; Single level, with under-croft carparks.
High-care facility; Two level, high-care facility, including an 18 bed secure
dementia unit
Location: Central Perth suburb of Subiaco, ~2 km's south-west of the Perth
CBD; Approximately 40 km's south-west of the Perth CBD in the suburb of
Rockingham; Central Sydney suburb of Clover Lea, ~12 km's from Sydney CBD;
Sydney suburb of Fairfield, ~28 km's from Sydney CBD
Bed numbers: 78 beds; 40 beds; 64 beds; 93 beds
Expansion capability: Yes Yes Yes Reconfiguration only

Residential aged care sector information and trends (1)
Residential aged care is one of Australia's largest service sectors employing
350,000 people and delivering care to more than one million elderly through
over 1,000 providers. The industry has A$34bn in total assets, generates
A$14.8bn in annual revenues and received A$9.6bn of Government funding in
2014, around 3.6% of government expenditure.

In 2014 the sector had approximately 189,000 operational bed places with
average sector occupancy of 93%.  Total places grew by ~18,000 beds, or 1.6%
per annum between 2009 and 2015. In the next ten years it is estimated that
over 80,000 beds will need to be delivered (equating to 3.6% growth per
annum) in order to meet future demand. As a result, significant capital
investment in aged care infrastructure will be required.

David Carr said "The fundamental drivers of healthcare are well known to us
and this initial investment into aged care real estate is a logical extension
of the themes that have supported Vital's performance over many years.
Vital's portfolio diversification and weighting to aged care as a result of
this acquisition will be approximately 5% and we expect to see that weighting
increase over time as opportunities crystallise that will deliver long-term
portfolio and financial benefits to our investors."

- ENDS -
(1) Funding and Financing of the Aged Care Sector, July 2015

ENQUIRIES
David Carr, Chief Executive Officer
Vital Healthcare Management Ltd, Telephone 09 973 7301, Email
[email protected]

Stuart Harrison, Chief Financial Officer
Vital Healthcare Management Ltd, Telephone 09 973 7302, Email
[email protected]

About Vital Healthcare Property Trust
With a portfolio value of over NZ$834m, Vital Healthcare Property Trust
(NZSX: VHP) is Australasia's largest listed investor in healthcare real
estate. Tenants include hospital operators and healthcare practitioners who
deliver a wide range of medical and healthcare related services. The Manager
of Vital Healthcare Property Trust is Vital Healthcare Management Limited.

vitalhealthcareproperty.co.nz
End CA:00278694 For:VHP    Type:ASSET      Time:2016-03-02 17:24:03