Auckland-based Vital Healthcare Property Trust yesterday announced it was undertaking a capital raise to fund two South Island acquisitions, including Queenstown’s new health facility Kawarau Park.
The company, which is managed by Canadian-listed NorthWest Healthcare Properties Management Ltd, listed in 1999. It owns private hospitals, ambulatory care facilities and aged-care facilities throughout New Zealand and Australia.
It said it had entered into an agreement, worth $95million, to acquire Kawarau Park.
The newly developed health precinct includes six individual buildings housing Queenstown’s only private hospital.
The deal was subject to several conditions including as due diligence, board approval and the existing tenant at the property agreeing to waive is pre-emptive rights to purchase the property.
Vital fund manager Aaron Hockly said the company was confident the transaction would be approved.
Vital had wanted to expand into to the South Island, particularly Christchurch, for a while, he said.
Queenstown had not initially been a target but Kawarau Park "made sense on a range of levels".
There was a large untapped market for "medical tourism" in the lower South Island, particularly Central Otago and Queenstown, Mr Hockly said.
"People could travel to Queenstown for knee surgery and recuperate overlooking The Remarkables."
Invercargill was another area where Vital saw potential for niche healthcare options.
"We will work hard on that once we get these current transactions out of the way," Mr Hockly said.
Vital would also look at other opportunities in the lower South Island.
As well as the Queenstown deal, Vital acquired a large ambulatory care facility in Christchurch, for $50.7million, which settled on April 1.
The balance of the funds would be used on other acquisitions and developments in Auckland, as well as paying down debt.
Vital’s stock last traded at $3.120 a share on Wednesday, before it was placed in a trading halt which will last until Monday.
