Highlights

  • Internalisation agreement reached with the current manager under defined commercial terms.
  • NZD 220m equity raising to fund management transition and near-term projects.
  • New manager appointment, licensing processes and regulatory approvals required for completion.

Vital Healthcare Property Trust (NZX:VHP) has announced a conditional agreement to internalise its management structure through the retirement of Northwest Healthcare Properties Management Limited as manager. The internalisation process is intended to transition management responsibilities into a new governance framework, with arrangements negotiated by the Independent Directors of Vital on an arm’s-length basis.

Under the agreed terms, Northwest will receive a Management Termination Payment of NZD 214m plus GST for surrendering management rights. Based on current expectations and subject to a binding ruling from the Inland Revenue Department, the net after-tax cost to Vital is estimated at NZD 177m. Trustee Executors Limited will appoint a new entity as the interim manager, with unitholder ratification to be sought at Vital’s 2026 annual meeting. Licensing for the new manager is being sought under the Financial Markets Conduct Act.

The transition includes retention of key personnel, including the CEO and CFO, alongside a majority of the healthcare property team. Northwest will continue to provide support services under a transitional services agreement with an initial 24-month term, which may be extended for two further periods of six months each. Board composition will remain unchanged during this phase.

Independent Assessments and Expected Outcomes

Multiple advisory firms provided financial, legal, tax and independent valuation guidance to the Independent Directors when negotiating the internalisation terms. Northington Partners assessed the valuation of the management rights and provided an independent expert view regarding the projected impact on Vital. The arrangement also includes Vital delivering certain development consulting services to Northwest’s AUSD 2.6bn Australian healthcare portfolio.

Completion of the internalisation remains subject to lender consents, amendments to financing documents, regulatory approvals from the Foreign Investment Review Board and Overseas Investment Office, licensing of the New Vital Manager, and raising at least NZD 175m of net proceeds through the capital raising. Settlement is anticipated on 31 December 2025 or in early 2026 if further time is required.

Equity Raising Structure and Pricing Details

To fund the Management Termination Payment and support upcoming development priorities such as Coomera Stage 1A and Macarthur Stage 2, Vital has launched a NZD 220m equity raising comprising a NZD 190m underwritten placement and a NZD 30m unit purchase plan (UPP). New units under the placement will be issued at NZD 1.95 per unit, reflecting a 9.5 percent discount to the dividend-adjusted closing price on 7 November 2025. The placement is underwritten by Craigs Investment Partners, Forsyth Barr Group and Barrenjoey Markets.

Northwest has indicated it will not participate in the placement and has agreed to an escrow arrangement extending to the release of Vital’s 1H26 results. The UPP will open on 14 November 2025, allowing eligible unitholders to apply for up to NZD 50,000 in new units. The price will be the lower of the placement price or a 2.5 percent discount to the five-day volume-weighted average price at the end of the UPP period.

Share Performance of VHP

VHP was trading at NZD 2.1800 per share as of 10 November 2025.