This article is from the Australian Property Journal archive
A $90 million net gain on HealthCo’s recently acquired Healthscope Knox Private Hospital development project has helped the health and wellness REIT to a 7.4% portfolio valuation uplift.
The project was taken on by HealthCo as part of its $1.2 billion acquisition of Healthscope and 11 of its hospitals.
HealthCo saw a $71 million net valuation gain for June 30, taking its portfolio value up overall $118 million to $1.708 billion. Net of capital expenditure incurred during the six-month period, the valuation increase was 4.5%, or $71 million.
Fourteen of its 42 assets were independently valued, including seven of its Healthscope acquisitions, and 28 internally. The Healthscope acquisitions revalued increased in value from $730 million to $838 million, for a net uplift of 14.3%.
“The valuation results reflect the resilient nature of our portfolio, supported by favourable megatrends which will underpin long-term demand for healthcare services and the supporting infrastructure,” said HealthCo’s senior portfolio manager, Sam Morris.
HealthCo’s overall portfolio weighted average capitalisation rate softened very slightly to 5.06%.
“The $90 million net valuation gain from the Healthscope acquisition is comprised of a gain from the Knox Private Hospital which reflects income rentalised as part of the brownfield expansion main works which is on track for completion by Q1 FY24,” Morris said.
The George Centre in Sydney’s Gregory Hills was completed on time and on budget was received a net valuation uplift of $7.5 million to $106 million.
“The positive valuation outcome we have achieved at The George and Healthscope Knox highlights our ability to create value for our shareholders via the accretive development pipeline,” Morris said. HealthCo expects further positive Healthscope portfolio revaluations to be realised upon settlement of tranche three assets and completion of the development at Knox.
A quarterly distribution of 2.0c per unit was declared, resulting in a full-year FY23 distribution of 7.6c per unit, in line with guidance. Funds from operations (FFO) per unit of 8.0c and statutory FFO unit guidance of 6.9c were reaffirmed.
