HealthCo resolves hospital leases and reinstates distribution
- Lease agreements for the remaining 10 Healthscope hospitals have been finalised with three healthcare operators.
- The company declared a first-quarter distribution of 1.5 cents per unit.
- The transactions stabilise the portfolio value at $1.35 billion while extending lease terms.
HealthCo Healthcare & Wellness REIT (ASX:HCW) has secured binding lease agreements for its 10 Healthscope hospitals, enabling the reinstatement of unit distributions.
The resolution addresses lingering operator uncertainty across the portfolio, which had previously impacted distributions.
“The resolution of the Healthscope situation is aligned with our previously stated objectives including providing continuity of service across all hospitals and maximising long-term value for HCW unitholders,” said HCW Funds Management Limited Fund Manager Christian Soberg.
Under the agreements, state-by-state operators will take over operations, extending the weighted average lease expiry by 2.9 years to 13.5 years while maintaining $1.35 billion in portfolio valuation.
The operational transition to Healthe Care, Acurio, and KnG Group is targeted for completion by 30 November 2026, during which Healthscope will maintain existing lease obligations.
Following the announcement, the HealthCo Healthcare & Wellness REIT share price was unchanged at $0.70.
The healthcare property trust maintains a portfolio of hospital assets across Australia, with the new agreements reducing its largest tenant concentration from 57% down to 31%.
The fund holds direct and indirect interests in health assets, including a 49.6% stake in the Unlisted Healthcare Fund.
