HealthCo Healthcare & Wellness REIT (ASX: HCW) Announces Valuations and Distribution
Valuation Insights
HealthCo Healthcare & Wellness REIT (ASX: HCW) reported a preliminary unaudited portfolio valuation of $1,587 million for December 2024. This reflects a gross valuation increase of $13 million, despite a net valuation decline of 0.9%, driven by capitalisation rate expansion. The firm noted that strong net operating income growth helped offset these impacts.
Asset Performance and Financial Position
HCW and UHF are in a solid financial position regarding their 11 hospital asset portfolio, which is leased to Healthscope, Australia’s second-largest private hospital operator. Healthscope has consistently paid all rent in full and on time. The firm maintains a strong pro forma balance sheet, with gearing at the lower end of its target range of 30-40%.
Distribution Details
The Responsible Entity has declared a distribution of 2.1 cents per unit for the quarter ending December 31, 2024. Key dates include an ex-distribution date of December 30, 2024, and a payment date set for February 26, 2025. CEO Christian Soberg stated, “Strong net operating income growth across the portfolio continues to support asset values despite a modest easing in capitalisation rates.”
Guidance Reaffirmed
FY25 guidance for Funds from Operations (FFO) per unit and Distribution per Unit (DPU) remains at 8.4 cents, indicating a 5% growth year-on-year. HMC Capital’s Managing Director, Sid Sharma, added that the robust valuations do not align with HCW’s current unit price, prompting continued unit buybacks to enhance value for unit holders.
Motley Fool contributor Kiarra Jackson has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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