VHP-Vital Healthcare Property Trust

[Shareguy]

Surprised did not have a thread here.

Discounted cap raise announced

https://www.nzx.com/announcements/462280

Decided to have a good look at this due to the discount offered and quality of the assets. Likely to enter NAREIT index in December review. FY26 distribution guidance of 9.75cpu was reaffirmed

NTA as of last quarter $2.56 against last close $2.18. On an FY26 pro-forma basis NTA reduces to CNZ$2.24 for Quality medical assets. According to presentation expected 2 percent accretive to AFFO and 12 percent value accretive. Slight decrease in gearing to 40 percent.

FB have it as OP at $2.37

NAREIT watch
We have highlighted over the last couple of months that VHP is likely to re-enter the NAREIT index in the December review. With the review period now complete, we believe VHP has met both the liquidity and market-capitalisation requirements. We estimate the liquidity requirement (median monthly turnover >0.05% of free float) was passed for 11 of the 12 months to October 2025. If VHP is included in the NAREIT index, it is highly likely that it will also meet the liquidity and size requirements for the FTSE Small Cap index at the March review. We estimate that demand from NAREIT in December could be c.19m shares, or 46x average daily volume, and from FTSE Small Cap in March could be a further c.10m shares, or 24x average daily volume. Index changes will be announced on 4 December, with the rebalance at market close on 19 December.

The cap raise is to end what it says is an outdated structure and brings in-house the management to save $20.9m a year in management fees. It will pay 8.5 times earnings on the fees it will save.  Expecting owning the management to be a positive for NTA share price gap. Divi ok with full benefit of future growth to be captured.

Disc/ New position, Participated in the placement at $1.95

[Basil]

Sound long term buying at $1.95 I reckon.  Net yield of 5% is quite satisfactory for the long lease and low risk nature of the healthcare assets.  Unfortunately this capital raise comes hard on the heels of Precinct's recent significant one and has sucked a lot of the oxygen out of the room in this sector, yet again, which is pretty disappointing having to endure that again in such a short space of time. 

Good this odious and outdated management structure has finally been removed, (should have been done years ago at a much lower price) but at $2.18 for those buying on market I note a net yield of only 4.47% which might be quite satisfactory for long term investors but it falls below my required rate of return.  Best wishes to holders.

[Shareguy]

Yes it's certainly created a good buying opportunity for other prop company's. The placement price equates to a 5.0% cash yield and an 8.2% gross yield (39% taxpayer). It was scaled so will be interesting where it ends up.

[Shareguy]

$2 and holding.  Craigs have added as a position in their NZ portfolio. Has also been added to the FTSE EPRA Nareit Index.

FB say We reinstate our Vital Healthcare (VHP) rating at OUTPERFORM and a NZ$2.23 target price. We view VHP's portfolio of long-leased healthcare assets as attractive, and the internalisation of management as a long-term positive. The current environment of modest inflation and stable interest rates is supportive of earnings growth, and we forecast AFFO to lift +5% by FY28