HealthCo Healthcare & Wellness REIT (ASX: HCW) released its results for the full year ended 30 June 2024. Highlighting the operational strength and income security of HCW’s portfolio, which is underpinned by long-term leases to Australia’s leading providers of critical healthcare services and supportive demographic fundamentals. Key highlights include: 

Investment and development highlights 

• Robust Jun-24 asset revaluations, delivering a +2.3% increase on the Dec-23 portfolio value1
• Successful first close of the ~$1.3bn2 Unlisted Healthcare Fund (UHF) with $650m of equity commitments from HCW and major global institutional investors 
• Development projects at Springfield, Nepean, Knox and Northpark all completed in FY24
• Executing $200m asset recycling program with $195m of assets sold broadly in-line with book value 
•  Healthscope continues to meet all lease payments and obligations under the lease terms
• Included in the S&P ASX300 index in FY24 
• Executing on $50m on-market unit buyback (14% complete) 

Operational highlights 

• 99% occupancy3 maintained 
• 100% cash rent collection  
• 12.2 year WALE4, with ~82% of leases expiring in FY30+ 

Financial highlights  

• FY24 FFO of 8.0cpu ($45.3m) representing +16% growth versus FY23 
• FY24 DPU of 8.0 cents representing +5% growth versus FY23 
• Gearing of 32.5% at the lower end of the 30-40% target range and ~$89m of available liquidity
• NTA/unit of $1.64 in line with Dec-23 

FY25 guidance  

• FY25 FFO guidance of 8.4cpu, representing 5% growth on FY24 
• FY25 DPU guidance of 8.4 cents, representing 5% growth on FY24 

HCW Fund Manager, Christian Soberg said, “FY24 was a period of operational strength and demonstrative  of the critical infrastructure like characteristics of the healthcare property asset class. 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.” 

“HCW’s portfolio continued to maintain 100% cash collections, 99% occupancy and a long-term lease expiry  profile of over 12 years throughout FY24, supporting the positive asset revaluations recorded in June 2024. In  addition, HCW continued to successfully execute on the asset recycling program with $195m of assets sold  broadly in-line with book value.” 

“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.” 

HMC Capital Managing Director, Real Estate, Sid Sharma said, “Following the successful first close of UHF  in September 2023, we were pleased to introduce a fourth institutional investor into the fund in December, taking  total equity commitments to $650m. The establishment of the fund with major global institutional investors  creates additional funding flexibility to activate HCW’s value accretive development pipeline. The pipeline builds  on our track record of delivering over $300m of greenfield and brownfield projects since the IPO under 3 years  ago.” 

“We are pleased to provide FY25 FFO and DPU guidance of 8.4cpu, representing 5% growth over FY24 and  reflective of HealthCo’s high quality asset portfolio. We continue to focus on opportunities to create value for  our unitholders and address the unit price discount to NTA through proactive capital management initiatives”.  

For additional information please refer to the FY24 financial results presentation which was also released on the ASX. 

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