Zenith reaffirms rating on Australian Unity Healthcare Property Trust
The Healthcare Property Trust (HPT) is a sector specific, open-ended unlisted property trust representing a mature fund within the sector with a solid established track record.
Strategically placed to provide investors with a diversified exposure to healthcare related assets, the Trust has traditionally represented a solid investment with exposure to defensive assets on long-term leases and high calibre management. Zenith has issued an updated Product Assessment on the Australian Unity Healthcare Property Trust (Retail, Wholesale and Class A units) and confirms the retention of the Highly Recommended rating across all unit classes.
Zenith’s View
Zenith has retained their view of the Trust as a superior offering within the sector. Since our last review, management continues to pursue value-adding works within the HPT and monitor opportunities to potentially divest mature assets to recycle capital. Historical returns have traditionally performed well against performance benchmarks, generating solid risk adjusted returns with low volatility.
While outperformance has slowed in more recent years, Zenith maintains solid conviction in the Fund’s merit as a defensive play with stable income and growth potential.
Zenith is of the opinion that the HPT continues to represent one of the few ways for investors to access this specialist asset class directly. Fund distributions were given a boost in FY12 from reduced credit margins and while burdened with recent losses from out of the money interest rate swaps, portfolio metrics continue to be very strong and we expected to see solid rental growth going forward.
Zenith has retained our rating based on our continuing opinion that the portfolio of diversified quality healthcare assets which are strongly defensive by nature and with high barriers to entry continues to provide strong risk adjusted returns to investors in this sector over the long term. Zenith rates the Australian Unity Healthcare Property Trust Highly Recommended.
