My perspective is long term fundamental value not short term...

My perspective is long term fundamental value not short term momentum.

Healthscope comprises around half of HCW's assets. So even (say) a 20% reduction in rent to Healthscope, is around a 10% reduction across the portfolio. The share price has way over discounted this.

Say a 10% reduction in FFO translates into a 10% reduction in the dividend, then the dividend at current prices is still around 7.9%.

And the cap rate implied by the share price is around 7% which makes little sense to me as barriers to entry are so high, sector WALEs are long, occupancies are high, and incentives are low. This isn't the office sector.

The Healthcsope hospitals will be occupied, and rent will be paid. The Govt cant afford for these hospitals not to operate. The only question is what is the right value and capital structure for a hospital operator. That's short term digestion issue for HCW, but not a long term problem.

The landlord needs to get an adequate rent return on cost, and with replacement costs just going up and up, I doubt there is any material downside risk to rents over the medium to longer term. If there is a risk then hospitals won't be built - and the government won't allow the industry to be unsustainable.