Vital Healthcare Property Trust reported a 2.7 per cent decline in first-half earnings as the listed hospital owner and developer's expanding assets generated a bigger management fee.
Adjusted funds from operations, the new preferred measure of listed property investors, fell to $23.4 million in the six months ended December 31 from $24m a year earlier, Vital's manager said in a statement.
That was weighed down by a 66 per cent jump in the manager's incentive fee to $5.8m and a 49 per cent increase in the base management fee to $5.6m, reflecting a series of acquisitions adding Acurity New Zealand's hospitals, the Eden Rehabilitation Hospital and The Hills Clinic in Australia for a total of $187m.
The value of Vital's property portfolio rose to $1.67 billion as at December 31 from $1.38b a year earlier, including a $42.8m unrealised fair value gain, prompting a 16 per cent increase in net profit to $52.9m.
"With a solid foundation and a defensive and resilient portfolio position, we look forward to the continued execution of our disciplined scale and diversification strategy," said David Carr, chief executive of manager NorthWest Healthcare Properties Management.
"Irrespective of periodic political or regulatory interference in otherwise entrenched healthcare systems in New Zealand and Australia, we continue to see strong demographic, ageing and technological trends driving demand for healthcare services - delivered from quality healthcare infrastructure."
The hospital investor has been expanding and diversifying its portfolio since it raised $160m in a rights issue in 2016, and has six projects in its development pipeline over the next four years.
Its 42 properties across NZ and Australia are at a 99.3 per cent occupancy rate.