$7.2m Asset Sale Concludes Calan Repositioning
14 April 2005
$7.2 Million Asset Sale Concludes Calan Repositioning
Calan Healthcare Properties Trust has concluded an unconditional sale for its equity investment in hospital operator, The Ascot Hospital & Clinics Limited for $7.2 million.
The funds realised will be used to reduce borrowings, increasing pre-tax earnings for the specialist health sector property investor by more than $440,000 a year.
The buyer of this shareholding in The Ascot Hospital & Clinics Limited is Integrated Hospitals Limited, the 78% majority shareholder in The Ascot Hospital and Clinics Limited. Financial settlement is scheduled for 9 May 2005.
The sale will see Calan make a gain on the sale of $250,000.
The sale concludes Calan’s repositioning strategy over the past twenty-four months that has seen it realise more than $25 million of non revenue producing assets.
The realisation of these assets has transformed the Trust.
Our goal of transitioning the entity through to a low risk, medium return healthcare property fund involved in essential healthcare facilities has now been achieved.
Future growth will be achieved through strategic acquisitions in the healthcare property sector via sale and leaseback of existing assets or from pre-committed new builds such as our $50 million Epworth Eastern facility in Melbourne, that are earnings positive.
With Epworth Eastern included, the portfolio will have an average lease term to maturity of 11.42 years (which is the longest of any listed entity by a significant margin) and with an occupancy rate across the portfolio at 99.4%, we consider Calan’s portfolio of property to be low risk.
In the past twenty-four months Calan has concluded the sale of the following non-revenue producing assets:
- Waitemata site
for $12.825 million
- Equity investment in The Ascot Hospital & Clinics Limited for $7.2 million
- New Street, Melbourne $3.1 million
- Artemis Medical Centre for $2.2 million
- Its 20% stake in Ascot Radiology (for between $500,000 and $1 million)
Calan’s portfolio now consists of 12 properties across 3 sub-sectors of health, 72 tenants and is located in four main geographic locations. The portfolio weighted by value is:
- Auckland 48%
- Melbourne 37%
- Hawkes Bay 9%
- Whangarei 6%.
With effect from the December 2004 quarter, Calan increased its quarterly distribution to 2.15 cents, which will bring its full distribution to 30 June 2005 to 8.45 cents, and 8.6 cents on an annualized basis.