HCW – HealthCo Healthcare and Wellness REIT

HealthCo Healthcare and Wellness REIT will be a Real Estate Investment Trust listed on the ASX focussed on owning healthcare and wellness property assets. The REIT’s objective is to provide exposure to a diversified portfolio underpinned by healthcare sector megatrends, targeting stable and growing distributions, long-term capital growth and positive environmental and social impact.

To deliver its objective of stable and growing distributions, HealthCo REIT’s strategy is to:

• maintain a diversified exposure across geographies, tenants and target subsectors of healthcare and wellness;
• target stable income characteristics including long leases, contracted rental escalations (including fixed and CPI escalations), sustainable rents and strong tenant covenants;
• pursue accretive acquisition and development opportunities; and
• maintain an appropriate capital structure with a target Gearing range of 30 to 40%.HealthCo REIT will target a balanced exposure to a model portfolio comprising of Hospitals; Aged Care; Childcare; Government, Life Sciences & Research; and Primary Care & Wellness properties

The Model Portfolio is expected to benefit from attractive megatrends underpinning long-term demand for healthcare and wellness properties. Ageing population, increased consumer health literacy and technological changes leading to improvements in detection and treatment of illnesses are contributing to increased utilisation of health services. In addition, increasing government expenditure is supportive of continued investment in health and wellness infrastructure.

HealthCo REIT’s portfolio will consist of 27 assets with a fair value of $555 million. The Portfolio is strategically located with 97% of Properties12 across the eastern seaboard states of NSW, VIC and QLD and one property in WA. It has a Weighted Average Capitalisation Rate (WACR) of 5.34%13, a Weighted Average Lease Expiry (WALE) of 9.4 years and an occupancy rate of 96%.

HealthCo REIT will target stable and growing distributions with the forecast FY22 annualised Distribution Yield per Unit of 4.5% for the period from Completion to 30 June 2022. 100% of the forecast FY22 distributions are expected to be tax deferred. The distributions will be paid to Unitholders quarterly. The first distribution is expected to be a pro rata amount based on the period between the date of Completion and 31 December 2021.

It is anticipated that HCW will list on the ASX during September 2021.