HealthCo Healthcare and Wellness REIT (ASX:HCW) reached binding agreements covering the remaining 10 Healthscope hospitals owned by the company and its Unlisted Healthcare Fund, clearing the way for distributions to be reinstated, according to a Monday filing with the Australian bourse.
The new 20-year leases with Healthe Care, Acurio, and KnG Group are expected to preserve the portfolio's AU$1.35 billion valuation while reducing the largest tenant concentration to 31% from 57% and extending the weighted average lease expiry by 2.9 years to 13.5 years, per the filing.
The leases will also provide consumer price index-linked or 3% annual rent escalations, with an around 12% incentive funded from existing liquidity, the filing said.
The transition to the new operators is expected to be completed by Nov. 30, with Healthscope continuing to operate the hospitals until then.
The company declared a fiscal first quarter distribution of AU$0.015 per unit, in line with its AU$0.06 fiscal 2027 guidance, with the record date set for Oct. 9 and payment scheduled for Nov. 24, the filing added.