This article is from the Australian Property Journal archive
HMC Capital’s HealthCo Healthcare & Wellness REIT (HCW) rode the tailwinds in the healthcare property sector in FY24 to funds from operations (FFO) growth of 16%.
The REIT offered FY25 FFO and distributions per security guidance of 8.4c per unit, showing a further 5% growth over FY24.
FY24 FFO came in at 8.0c per unit, or $45.3 million, as did distributions.
“FY24 was a period of operational strength and demonstrative of the critical infrastructure like characteristics of the healthcare property asset class,” said HCW fund manager, Christian Soberg.
“The private hospital sector is integral in the provision of healthcare services to the Australian population and provides critical support to the public system, which is consistently operating at above capacity with long waiting lists for urgent care.”
While much of the commercial real estate sector is grappling with falling values, HCW recorded a 2.3% increase in revaluations in the June half, supported by the portfolio maintaining 100% cash collections, 99% occupancy and a long-term lease expiry profile of more than 12 years.
HCW’s ongoing asset recycling program saw $195 million of assets sold broadly in-line with book value.
FY24 saw the successful first close of the $1.3b billion Unlisted Healthcare Fund (UHF) with $650 million of equity commitments from HCW and major global institutional investors, with a fourth institutional investor introduced to the fund in December.
“Our tenant partner Healthscope, Australia’s second largest private hospital operator, continues to meet all lease payments and obligations under the lease terms. In addition, HealthCo remains in a strong financial and legal position with strong rent cash coverage across all 11 HCW / UHF-owned assets leased to Healthscope,” Soberg said. HCW agreed to acquire Healthscope early last year for $1.2 billion.
HMC Capital managing director, real estate, Sid Sharma said the establishment of the fund with major global institutional investors “creates additional funding flexibility to activate HCW’s value accretive development pipeline”.
HCW has delivered $300 million worth of greenfield and brownfield projects since the IPO under three years ago.
Sharma said HCW continues to “focus on opportunities to create value for our unitholders and address the unit price discount to net tangible assets (NTA) through proactive capital management initiatives”.
Net tangible asset was steady in the June half at $1.64 per unit. Its share price closed yesterday 2.14% higher at $1.20.
