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.

theoretically closing today; in all likelihood it is oversubscribed.

a 10+% stag on opening numbers .... HCW trading above $2.20

This baby is another choice for the 2022 Tipping Comp.
I believe a number of REITs may shine in the coming months. This one focuses on secure leases related to health and government leases. Let's see how it goes.

Dona Ferentes said:

a 10+% stag on opening numbers .... HCW trading above $2.20

Click to expand...

but downhill ever since. Squeezed by cap rate changes, most likely

Now $1.41. Paying a distribution, 3% yield, but is that compensation enough

HEALTHCO HEALTHCARE & WELLNESS REIT DELIVERS +2.3% GROSS VALUATION GAINS

KEY HIGHLIGHTS
▪ Jun-24 preliminary unaudited valuation gain of $37m, representing a +2.3% gross increase on the Dec23 pro-forma portfolio value1 , driven by:
– $4m (+0.6%) net gain realised on HCW’s equity accounted investments
– -$4m (-0.4%) net impact realised on HCW’s balance sheet investment properties, driven by positive net operating income growth offset by minor capitalisation rate softening
– $37m of capital expenditure in the existing portfolio
▪ Expected to complete $200m asset recycling program by 30 June 2024
– HCW has now divested $158m2 of its previously announced $200m asset recycling program at a passing yield3 of 5.2%. HCW is targeting an additional ~$40m of asset sales by the end of FY24
▪ Distribution of 2.0 cents per unit for the quarter ended 30 June 2024 declared
▪ FY24 FFO/unit & DPU guidance of 8.0c reaffirmed
HealthCo Healthcare & Wellness REIT (ASX: HCW) Senior Portfolio Manager Christian Soberg, said: “The valuations reflect the critical infrastructure characteristics of the HealthCo portfolio and in particular our private medical surgical hospitals, which recorded a $12m4 net valuation gain driven by income growth.”
“The solid pricing outcomes we have achieved in our asset recycling program highlights the continued investment demand for high quality healthcare and essential infrastructure real estate assets.
We continue to recycle proceeds from the disposal program into the accretive on-market unit-buyback whilst maintaining gearing at the lower end of the 30-40% target range.”

JUNE 2024 QUARTER DISTRIBUTION DECLARATION

HCW Funds Management Limited as responsible entity of HCW (Responsible Entity) has declared the quarterly distribution for the period 1 April 2024 to 30 June 2024 of 2.000 cents per unit.

The key dates and details for the June 2024 distribution are:
Event Date Distribution amount 2.000 cents per unit
Ex-distribution date 27 June 2024 Record date 28 June 2024
Payment date and despatch of statements On or about 22 August 2024
HCW announced its on-market unit buy-back of fully paid ordinary units in HCW for up to $50 million on 23 April 2024.
In light of the buyback, HCW’s Distribution Reinvestment Plan (DRP) has been suspended with effect from 6 June 2024 until further notice9


i hold HCW ( a fairly recent buy ).

HEALTHCO HEALTHCARE & WELLNESS REIT DELIVERS 16% FFOpu GROWTH IN FY24 AND GUIDES TO FURTHER GROWTH IN FY25

HealthCo Healthcare & Wellness REIT (ASX: HCW) today released its results for the full year ended 30 June 2024.
Today’s result highlights 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-23FY25 guidance
▪ FY25 FFO guidance of 8.4cpu, representing 5% growth on FY24
▪ FY25 DPU guidance of 8.4 cents, representing 5% growth on FY24

i hold HCW

SEPTEMBER 2024 DISTRIBUTION DECLARATION
HCW Funds Management Limited as Responsible Entity of HealthCo Healthcare and Wellness REIT (ASX:HCW) has declared the quarterly distribution for the period 1 July 2024 to 30 September 2024 of 2.100 cents per unit.
Key dates are as follows.
Event Date
Distribution amount 2.100 cents per unit
Ex-distribution date 27 September 2024
Record date 30 September 2024
Payment date and despatch of statements On or about 22 November 2024

This announcement is authorised for release by the Board of the Responsible Entity.

i hold HCW

HEALTHCO HEALTHCARE & WELLNESS REIT ANNOUNCES DECEMBER 2024 PROPERTY VALUATIONS AND DECLARES DECEMBER 2024 DISTRIBUTION

KEY HIGHLIGHTS
▪ December 2024 preliminary unaudited portfolio valuation of $1,587m, representing a gross valuation increase of $13m and a net valuation impact of -0.9%1, with the movement driven by 8bps of capitalisation rate expansion, partially offset by strong net operating income growth
▪ HCW and UHF remain in a strong financial and legal position in relation to the 11 hospital asset portfolio leased to Healthscope, Australia’s second largest private hospital operator, with Healthscope continuing to pay all rent in full and on time
▪ Strong pro forma balance sheet maintained with pro-forma gearing at the lower end of HCW’s target gearing range of 30-40%2
▪ Distribution of 2.1 cents per unit for the quarter ended 31 December 2024 declared▪ FY25 FFO/unit & DPU guidance of 8.4c reaffirmed, representing 5% year-on-year growth
HealthCo Healthcare & Wellness REIT (ASX: HCW) Fund Manager Christian Soberg, said: “Strong net operating income growth across the portfolio continues to support asset values despite a modest easing in capitalisation rates.
The stable valuations reflect the critical infrastructure characteristics of the HealthCo portfolio, which is underpinned by a growing and ageing population and long-term leases to national healthcare operators and Government tenants.
”HMC Capital Managing Director, Real Estate, Sid Sharma said, “In our view the strong operating fundamentals and robust valuations do not align with HCW’s current unit price, which is why we continue to actively buy back units and realise value for unit holders.
Finally, we are pleased to reaffirm our guidance for FY25, which is consistent with HCW’s objective of delivering stable and growing distributions.”

DECEMBER 2024 PRELIMINARY UNAUDITED PORTFOLIO VALUATION
In accordance with the stated valuation policy of HCW, preliminary unaudited valuations for all 28 properties in the portfolio have been completed3.
This comprised 16 independent valuations, representing 50% of the properties by value and 57% by number, with the remaining 12 properties completed by internal valuation.
The preliminary unaudited portfolio valuation, which remains subject to half-year audit, has increased by $13m(+1%) to $1,587m (vs. pro forma 30 June 2024).
Net of capital expenditure incurred during the period of $27m,valuations were impacted by -0.9% in the 6 months to 31 December 2024.

i hold HCW

hmmm that may slow the downtrend i have been nibbling away at

but just in case i still has a sub $1 order in the market

Financial update
▪ 1H FY25 FFO of 4.2cpu ($23.5m) representing +5% growth versus 1H FY24
▪ 1H FY25 DPU of 4.2 cents representing +5% growth versus 1H FY24
▪ Gearing of 32.4% at the lower end of the 30-40% target range and ~$115m of available liquidity

Operational highlights
▪ 100% cash rent collection
▪ 99% occupancy maintained
▪ 11.6 year WALE, with 82% of leases expiring in FY30+

Investment highlights
▪ Stable Dec-24 asset revaluations, delivering a +0.8% increase on the Jun-24 portfolio value
▪ Development project at Mount Private Hospital remains on track for completion in 2H FY25
▪ Executing on $50m on-market unit buyback (35% complete)

Healthscope update
HCW notes the recent increased market speculation around Healthscope. It is likely that the speculation will persist until a sustainable solution which underpins continuity of hospital services is found. HCW and UHF have made it clear that further rental support will not be provided to Healthscope. In the event that Healthscope were to breach its lease obligations, HCW would seek to replace Healthscope’s tenancies with other hospital operators.

HCW and UHF have been approached by capable and qualified parties to potentially tenant the 11 hospitals including a consortium led by HMC Capital’s Private Equity Division. HCW understands that HMC is in discussions with a broad group of key stakeholders as part of the consortium.
HCW will consider all proposals.

FY25 guidance
HCW reaffirms its previous FFO/unit and DPU guidance of 8.4 cents. This guidance is based on the continued performance of HCW’s portfolio including the contractual obligations of Healthscope.
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and, since listing

HEALTHCO DELIVERS 5% FFO pu GROWTH IN 1H FY25

HealthCo Healthcare & Wellness REIT (ASX: HCW) today released its results for the half year ended 31 December 2024.Financial update
▪ 1H FY25 FFO of 4.2cpu ($23.5m) representing +5% growth versus 1H FY24
▪ 1H FY25 DPU of 4.2 cents representing +5% growth versus 1H FY24
▪ Gearing of 32.4% at the lower end of the 30-40% target range and ~$115m of available liquidity Operational highlights
▪ 100% cash rent collection
▪ 99% occupancy1 maintained
▪ 11.6 year WALE2, with 82% of leases expiring in FY30+Investment highlights
▪Stable Dec-24 asset revaluations3, delivering a +0.8% increase on the Jun-24 portfolio value4
▪ Development project at Mount Private Hospital remains on track for completion in 2H FY25
▪ Executing on $50m on-market unit buyback (35% complete)
Healthscope update
HCW notes the recent increased market speculation around Healthscope5.
It is likely that the speculation will persist until a sustainable solution which underpins continuity of hospital services is found.
HCW and UHF have made it clear that further rental support will not be provided to Healthscope.
In the event that Healthscope were to breach its lease obligations, HCW would seek to replace Healthscope’s tenancies with other hospital operators.
HCW and UHF have been approached by capable and qualified parties to potentially tenant the 11 hospitals including a consortium led by HMC Capital’s Private Equity Division.
HCW understands that HMC is in discussions with a broad group of key stakeholders as part of the consortium.
HCW will consider all proposals.
FY25 guidance
HCW reaffirms its previous FFO/unit and DPU guidance of 8.4 cents.
This guidance is based on the continued performance of HCW’s portfolio including the contractual obligations of Healthscope.
1 By GLA. Includes signed leases and signed MOUs. Includes rental guarantees and excludes divestments & development assets.
2 By gross income. Includes signed leases and signed MOUs.
3 8 of the 11 HCW/UHF owned hospitals operated by Healthscope were independently valued.
4 Gross valuation increase.
5 Healthscope remains compliant with all their lease obligations.
HMC Capital Managing Director, Real Estate, Sid Sharma said, “We recognise that the HCW unit price has continued to be impacted by speculation about Healthscope and have proactively prepared for a number of potential scenarios that could play out in the short term.”
“We are pleased with the inbound interest from potential tenants eager to ensure continuity of essential healthcare services to Australians.
Our conviction in private hospitals as an asset class and our own hospitals remains unchanged”.
HCW Fund Manager, Christian Soberg said, "Our half year results reflect the strength of our healthcare real estate portfolio.
Our strong balance sheet with gearing at the lower end of our target range and a portfolio of high quality assets will ensure we can preserve and enhance long term value for our unit holders”.

For additional information please refer to the 1H FY25 financial results presentation which was also released on the ASXtoday.

Investor and analyst briefing teleconference call
An investor and analyst briefing teleconference call, followed by a Q&A session, will be held on Friday 14 February 2025 at 10:00am (AEDT).
Investors and analysts wishing to participate can pre-register for the call at: https://s1.cconf.com/diamondpass/10044657-d8w7fg.htmlThe following webcast link will be available: https://webcast.openbriefing.com/hcw-hyr-2025/

i hold HCW

HEALTHSCOPE UPDATE

HealthCo Healthcare & Wellness REIT (ASX: HCW) and the Unlisted Healthcare Fund (UHF) today issued breach noticesto Healthscope for failing to pay all rent due for March 2025.
Part payment of the rent has been received.
HCW and UHF will enforce their legal rights and seek to replace Healthscope’s tenancies with other hospital operators in the event the breaches are not remedied.
As foreshadowed at the release of HCW’s 1H FY25 result on 14 February 2025,
HCW and UHF are now in active discussions with alternative hospital operators.

FY25 Guidance

Given the above, HCW’s FY25 FFO/unit and DPU guidance of 8.4 cents has been withdrawn pending resolution of the Healthscope tenancies.

HCW has cash and undrawn debt facilities of approximately $100m and will receive additional support from HMC Capital as required, including the deferral of management fees.

This announcement is authorised by the Board of the Responsible Entity.

i hold HCW and have a small buy order in the market

MARCH 2025 DISTRIBUTION
Further to the announcement made by HealthCo Healthcare and Wellness REIT (ASX: HCW) on 4 March 2025 regarding the withdrawal of FY25 FFO/unit and DPU guidance,
HCW will not declare a quarterly distribution for the period 1 January 2025 to 31 March 2025 to preserve balance sheet flexibility.

HCW continues to work proactively to maximise long term value for HCW unit-holders and to ensure continuity of essential healthcare services to the Australian community.

This announcement is authorised by the Board of the Responsible Entity.

i hold HCW and have a small ( 'low-ball' ) buy order in the market

HEALTHSCOPE UPDATE

▪ HealthCo Healthcare & Wellness REIT (ASX:HCW) and the Unlisted Healthcare Fund (UHF) note that two entities within the Healthscope group have entered into receivership and administration

▪ HCW and UHF note that:-
The counter-parties that HCW and UHF contract with remain operating and are not in receivership or administration-

The existing legal rights of HCW and UHF remain in place, including cross default and termination rights.


As at today’s date, the termination rights are not yet enforceable1


This announcement is authorised by the Board of the Responsible Entity.

i hold HCW and have a small ( 'low-ball' ) buy order in the market

HEALTHSCOPE UPDATE

i hold HCW

looks my 'low-ball' top up order ( already in the market ) will have to wait a while longer

Greg Canavan is looking at this as a possible bombed out stock that might provide a return despite being a low return on capital business. Note: it's only a tentaive idea that he has mentioned, not a buy recc. Also metioned DMP and NUF in the same vein.

Not Held

finicky said:

Greg Canavan is looking at this as a possible bombed out stock that might provide a return despite being a low return on capital business. Note: it's only a tentaive idea that he has mentioned, not a buy recc. Also metioned DMP and NUF in the same vein.

Not Held

Click to expand...

i already hold HCW ( and have a low-ball order in the market ) and would suggest caution

they either have the Healthscope saga covered or they have NOT

being a REIT they will have finance agreements where the lenders will be laser-focused ( and THEY are the ones to worry about , they may demand forced selling on feared risk )

a hero or zero play , currently ( IMO )