HealthCo Healthcare & Wellness REIT (ASX:HCW) demonstrated significant resilience in its half-year results ended Dec. 31, 2025, maintaining robust operational performance despite ongoing complications with its major tenant, Healthscope.
The REIT reported a funds from operations of $12.3 million (2.2cpu) and a net tangible asset value of $1.39 per unit.
HCW’s balance sheet remains disciplined, ending the period with $155 million in liquidity and a gearing ratio of 28.5%—below its 30–40% target range—bolstered by $77 million in strategic asset recycling.
The portfolio is performing at near-capacity with 99% occupancy and 100% rent collection.
However, the market focus remains on the "Healthscope situation." HCW confirmed that while rent for all 11 hospitals has been paid through February, the "Landlords" have already secured executable agreements with alternative operators as a contingency.
While the backup agreements maintain current face rents and long-term tenure, they include rental incentives that could trigger a 10% to 15% near-term reduction in asset valuations.
HCW remains open to "constructive dialogue" with the receiver to find a resolution that ensures service continuity and protects unitholder value.Management emphasised that they have not yet received a formal proposal regarding the "PurposeCo" model promoted by Healthscope’s stakeholders.
At the time of reporting, HealthCo Healthcare & Wellness REIT's share price was $0.70.