Vital Healthcare Management Ltd – internalisation proposal

21 April 2011 MARKET RELEASE

Vital Healthcare Management Ltd – internalisation proposal

Further to the announcement on 19 April 2011, the Independent Directors of Vital Healthcare Management Limited (Bill Thurston and Graeme Horsley), the Manager of Vital Healthcare Property Trust, confirm that they have agreed with OnePath (NZ) Limited (wholly owned by ANZ Bank), the shareholder of the Manager, to exclusively progress the potential internalisation of the rights to manage the Trust, currently held by the Manager.

Key elements of the proposal would include:

• A payment of $14 million to Vital Healthcare Management Limited, reflecting the fair value of the current management arrangements being relinquished.

• Variations to the Manager’s remuneration arrangements under the Trust Deed so that in the future management services are provided on a cost recovery basis only.

• Vital Healthcare Management Limited’s agreement to retire and support the appointment of a new manager (being a newly formed company to which key employees, systems and infrastructure of the existing Manager would transfer) to manage the Trust.

• The transaction would be funded through the Trust’s existing bank facilities.

o The Trust’s forecast FY12 loan to value ratio may move to approximately 42% after allowing for all currently committed development funding – including the Lingard stage development announced yesterday. This remains below the maximum banking covenant ratio of 45% and the Trust Deed limit of 50%.

o The Board’s objective is to maintain the Trust’s gearing at less than 40% of property assets over the medium term through the implementation of appropriate strategies, including a continuation of the targeted sale of non-core, lower value assets.

• New governance arrangements whereby all directors of the new manager would be appointed at the direction of unitholders, and an appropriately qualified and experienced Australian director would be appointed to the board.

• Conditional on approval of the proposal by unitholders and the Trustee of the Trust. The proposal does not involve a corporatisation of the Trust, with the above arrangements effectively achieving a management internalisation of Vital.

Grant Samuel & Associates has been engaged and will provide an independent report on the merits of the final proposal for the benefit of the Independent Directors, unitholders and the Trustee. The Grant Samuel report would be distributed to unitholders with the notice of meeting.

The Independent Directors expect to convene a unitholder meeting in early August 2011, and subject to receiving unitholder approval at that meeting, expect to complete the proposal during August 2011.

– ENDS –

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