Vital Healthcare Property Trust has received Overseas Investment Office approval enabling it to commit unconditionally to the purchase of 3 hospitals from Acurity Health Group Ltd and up to $106.5 million to brownfield development over the next 4 years to expand the hospitals.
Vital agreed in May to buy the land & buildings at Wakefield & Bowen Hospitals in Wellington and the Royston Hospital in Hastings for $54 million.
Wakefield Hospital, Newtown
In addition to the acquisition, Vital has also committed to the full redevelopment of Wakefield Private Hospital alongside Acurity, subject to regulatory consents.
The completed development will include 8 operating theatres, 42 beds, a 3000m² medical consulting building, over 260 parking spaces, supporting infrastructure and patient & administration services. Expansion capacity will be built into the design to allow for growth as required.
Vital management company chief executive David Carr said on Friday: “The redeveloped Wakefield will be completed in stages to minimise disruption to existing operations. Completion of the works will provide a sector-leading, modern & functional facility for Acurity to deliver exceptional quality healthcare to patients for generations to come.”
The total forecast capital commitment is up to $82 million. The works are planned to start in 2018 and be completed in mid-2021.
Bowen Hospital, Crofton Downs
Vital also confirmed that, subject to regulatory consents, it has committed to the development of necessary infrastructure for radiation oncology services to be commissioned at Bowen Hospital.
The works will include the construction of 2 radiation oncology bunkers, initially with one linear accelerator but capacity to increase to 2 as demand increases.
Mr Carr said this was the first private radiation oncology service for patients in Wellington. The service is operated by Icon Cancer Care, Australia’s largest private provider of cancer care, in partnership with Acurity. He said radiation oncology services were a logical expansion following the recent commencement of private medical oncology services at Bowen by the Icon/Acurity partnership.
The total forecast capital commitment is up to $11.5 million. The works are planned to start in the first half of 2018 and are forecast to take about 9 months.
Royston Hospital, Hastings
Vital has committed to an immediate development project at Royston, alongside Acurity as hospital operator.
Subject to resource consent, the development will see an expansion into adjacent properties held for development and will incorporate an additional 2 operating theatres, reconfiguration of patient admission & recovery areas, and expansion of medical imaging.
Mr Carr said: “Our agreement with Acurity to enter into a 30-year lease and commitment to an immediate development project at Royston affirms our combined vision to enhance Royston’s long-held reputation as a quality private hospital serving the Hawke’s Bay region.”
The total forecast capital commitment is up to $13 million. The project is expected to start in late 2018, subject to regulatory consents, and is forecast to take about 12 months.
Vital is scheduled to settle the acquisitions this month. All development capital expenditure is forecast to be rentalised at a yield of about 7%.
12 May 2017: Vital enters asset & redevelopment partnership with Acurity
Attribution: Company release.