Vital announces Pro Rata Renounceable Rights Issue

26 June 2013

Vital Healthcare Announcement

Vital announces pro rata renounceable rights issue and preliminary portfolio revaluations Vital Healthcare Management Limited (the ‘Manager’), the manager of Vital Healthcare Property Trust (the ‘Trust’ or ‘Vital’), today confirmed it intends to raise up to NZ$39.2 million of new equity capital through a pro rata renounceable offer of new units to existing unitholders (the ‘Offer’).

Graeme Horsley, Independent Chairman of the Manager said “The Board considers it appropriate to seek further equity capital to be used initially to reduce bank debt. It will also provide additional flexibility to progressively fund Vital’s on-going capital expenditure programme, or may be applied to acquisitions as they arise. It was of paramount importance to the Board that this Offer be in a form that allows existing unitholders of Vital the opportunity to participate on an equitable basis and in priority to other prospective investors. A pro-rata renounceable rights issue gives unitholders that opportunity”.

The Trust intends to raise up to NZ$39.2 million of new equity through a 1-for-10 pro rata renounceable rights issue (entitlements to fractions of a unit will be rounded up to the nearest whole number). The issue price for new units will be $1.275 per unit.

The new units will rank equally with existing units on issue, including for the final quarter distribution for the financial year ending 30 June 2013, expected to be paid in September 2013. The Offer will not be underwritten however, unitholders who take up all their rights will be eligible to participate in an oversubscription facility to the extent there is any shortfall in acceptances under the Offer.

NorthWest International Healthcare Properties Real Estate Investment Trust (‘NorthWest’) has an interest in 20.02% of the units as at 21 June 2013, held through one or more related or associated entities. NorthWest has indicated to the Board it will ensure that those entities take up their full entitlement to new units being issued under the Offer and that one of those entities will apply for additional new units under the oversubscription facility.

NorthWest has agreed that its related or associated entities will not apply for, or be issued with, new units that will in aggregate take NorthWest’s interest in Vital above 24.99% of all units on issue.

David Carr, Chief Executive of the Manager said “The additional equity capital being sought will help further support the on-going delivery of Vital’s long term strategy of investing in quality healthcare and medical related property”.

Further details relating to the Offer will be provided in a simplified disclosure prospectus to unitholders. The Manager expects to register the simplified disclosure prospectus in early July and the Offer to open in late July.

No money is currently being sought and no applications for units will be accepted or money received unless the subscriber has received a copy of the simplified disclosure prospectus for the Offer made available by the Manager. A person should consider that prospectus once available, in deciding whether to acquire units.

2013 preliminary portfolio revaluations The Trust also today announced a preliminary unaudited portfolio revaluation increase of $9.9 million for the year ending 30 June 2013. The overall gain comprised $3.5 million for the New Zealand part of the portfolio and $6.4 million for the Australian part of the portfolio. The revaluation gain equates to approximately 1.6% when measured against the forecast book value as at 30 June 2013. The overall value of the Trust’s property portfolio is expected to increase to $624.8 million.vitalhealthcareproperty.co.nz The valuations were undertaken by independent valuers and are preliminary at this stage. They remain subject to the Trust’s 30 June 2013 year end audit and will be confirmed in the Trust’s financial results, expected to be announced on 23 August 2013.

Mr Carr said, “There were a number of core elements driving the increase. One was the conclusion of a number of the value add development projects in Australia resulting in the enhanced operational performance at those properties. Other elements included a high percentage of the Trust’s rental income that was subject to structured annual growth, continued occupancy levels close to 100%, and a general firming trend of capitalisation rates for quality properties”.

The weighted average market capitalisation rate for the portfolio will firm by 16 basis points, to 9.09% over the 12 month period to 30 June 2013.

As a result of the gains the Trust’s net tangible asset backing per unit is expected to improve by approximately 3 cents.

ENDS

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