Vital Healthcare Property Trust Limited, Annual Meeting 2025

25 October 2025

Vital Healthcare Property Trust (VHP)

The company will hold its Annual Shareholders Meeting at 12.00pm Thursday 6 November 2025.

The location is Tūhono Room, Ground Floor Lobby, HSBC Tower, 188 Quay Street, Auckland.

You can also join the meeting online at this link.

Company Overview

The Trust invests in health and medical-related properties in New Zealand and Australia. It is externally managed by NorthWest Healthcare Properties Management Limited (NWHPM), a subsidiary of Toronto Stock Exchange-listed NorthWest Healthcare Properties REIT.

NorthWest is the largest unit holder with 28%. The Trust has a portfolio of 34 properties valued at NZ$3.2B. WALE (weighted average lease expiry) is 18.5 years and occupancy is 98.6%.

In February 2025, the Trust announced that following consultation with Unit Holders and other parties including NZSA it had been decided not to proceed with a proposal to dual list the Trust on the ASX and NZX due to concerns around transitional matters.

Aaron Hockley the Fund Manager resigned in May 2025 after serving for 5 years. Chris Adams, Co-Head of Northwest Healthcare for the Australian and New Zealand region, will assume Aaron’s responsibilities.

In August 2025 Zachary Vaughan replaced Craig Mitchell as the NorthWest representative on the Board.

Current Strategy

The company’s vision is to be Australia and New Zealand’s leading listed healthcare property fund. Vital Healthcare seeks to deliver stable and growing total Unit Holder returns including an attractive risk-adjusted income distribution, majority sourced from healthcare real estate.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. VHP’s property portfolio is valued at NZ$3.2 billion, split 69% to Australia and 31% to New Zealand.
2. The portfolio was dominated by private hospitals representing 79% of Vital’s portfolio by value leased to the leading hospital operators across Australia and New Zealand.
3. Operating performance of VHP continued to be strong despite the sharp rise in interest rates which had adversely impacted property values and funding costs.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  Vital does not operate a fee pool, with fees approved on a per-Director basis. There is clear disclosure of the actual amounts paid to Directors. There is no disclosure as to whether retirement benefits are offered (not favoured by NZSA), nor if special exertion payments are made.

Given VHP’s status as an externally managed organisation, NZSA appreciates the voluntary disclosure of Directors fees.

Director Share Ownership:  Directors are not compelled to own shares, a position supported by NZSA. While the Chair holds units, the company discloses that the tax regime for Vital makes it uneconomic for the offshore based Directors and Officers to hold units.

CEO Remuneration:  The Trust is externally managed, with the terms of the fees paid to the Manager clearly disclosed to shareholders.

Director Independence:  A majority of Directors are independent.

Board Composition:  The Annual Report includes a Board skills matrix attributing skill sets to individual Directors to demonstrate how they contribute to the governance of the Trust.

We note that Vital does not participate in the IoD’s Future Director programme designed to develop and mentor the next generation of Directors. NZSA expects NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

The Annual Report does not include a table of Directors other governance roles, although these are included within their biographies provided in the Annual Report.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Director appointment dates range from 2018 to 2025.

ASM Format: Vital Healthcare Property Trust is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see that Boards are across their risk management responsibilities.

The Board Charter states that Directors are able to access external independent advice. The Board appoints a Board Secretary who is accountable to the Board on all governance matters. The Manager’s ultimate parent has an internal audit programme that includes an annual global internal control review. The scope of this programme encompasses both the Manager and Vital.

The company offers thorough disclosure of financial risks, with some discussion of business and operational risks and their mitigations. Vital discloses a ‘materiality matrix’ based on stakeholder feedback, and references both portfolio diversity and tenant concentration risks. A brief overview of the company’s risk governance framework is provided.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. Deloitte was appointed to replace KPMG in May 2025. KPMG had been the Audit Firm since 2008. Whilst NZSA acknowledges the constraints on Audit Firm rotation, we encourage disclosure or corporate policies and/or processes relating to audit tender.

Environmental Sustainability

Overall approach: Vital released its second climate statement under NZ’s Climate Standards for FY2025. The report is detailed and data-driven, highlighting outcomes (e.g. two new 6-star Green Star certified projects) rather than marketing.

Sustainability Governance: Climate oversight is fully integrated at the board and committee levels. The board explicitly “has overall responsibility” for climate risks/opportunities and approves Vital’s climate targets (e.g. the 5-star Green Star commitment). Directors receive dedicated climate training, four sessions in FY25, and the board regularly reviews progress on the net-zero 2050 goal. A formal Audit Committee reviews climate disclosures for compliance. Day-to-day risk management is delegated to an Operational Risk Committee (ORC) and Climate Working Group (CWG), which meet monthly/quarterly and report to the board. The board’s skills matrix includes ESG expertise. All this aligns with NZSA’s expectation of board capabilities and accountability.

Strategy and Impact: Vital has embedded climate risks into its core real estate strategy. Its board-approved 5-year plan includes a “Healthy Planet” pillar: all new developments are to be energy efficient, powered by renewables, and climate resilient. Detailed scenario analysis is used to stress-test Vital’s business model. Vital’s focus on sustainability supports stable income: it notes that healthcare low-carbon facilities can attract tenants and capital. Overall, Vital’s climate strategy aligns with NZSA’s call for integrated planning (linking environmental actions to business objectives).

Risk and Opportunity: The disclosure identifies a broad set of climate risks and opportunities. Vital reports that climate factors are now embedded in its enterprise risk framework and ranked alongside other strategic risks. Physical risks (e.g. flooding, cyclones, extreme heat) are explicitly assessed via site-level resilience checks. The scenario analysis highlights impacts on tenants and notes transition risks like potential asset stranding or rising insurance costs under one scenario. Vital also identifies opportunities: energy efficiency, renewable energy onsite, and advanced building design can reduce emissions and yield competitive returns. For instance, early investment in green buildings can “provide improved access to capital” from ESG-focused investors.

Metrics and Targets: Vital discloses comprehensive climate metrics and formal targets. It reports FY2025 gross GHG emissions and intensities. Vital’s long-term targets include net-zero emissions by 2050 (FY24 base) and requiring all new major developments or refurbishments to achieve ≥ 5-star Green Star. It also reports progress: two new projects achieved 6-star Green Star this year. Targets are clearly linked to business strategy; however, aside from the net-zero pledge, no intermediate emissions targets or quantifiable milestones are stated. NZSA Policy encourages disclosure of short-term targets and roadmap milestones, so defining nearer-term goals would enhance accountability.

Assurance: Vital’s FY2025 GHG inventory was externally audited by McHugh & Shaw Ltd, with reasonable assurance over Scope 1 and 2 emissions, and limited assurance over Scope 3. While this satisfies the New Zealand Climate Standards’ assurance requirements, expanding assurance coverage beyond emissions would bring Vital into full alignment with NZSA’s expectations.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  No donations are disclosed in the Annual Report. NZSA expects an explicit disclosure around whether political donations are made.

Financial & Performance

Vital Healthcare Property Trust’s share price rose from $1.90 to $2.33 (as of 8^th October 2025) over the last 12 months – a 23% increase. This compares favourably with the NZX 50 which rose 7% in the same period. The capitalisation of VHP is $1.6b placing it 27^th out of 115 companies on the NZX by size and makes it a large company.

¹ per share figures based off actual shares at balance date (not weighted average)

Vital Healthcare Property Trust is managed by Northwest Healthcare Properties. They also have a 28.20% stake in VHP. Property Revenue was up 3% to $154.9m and Operating profit was up 5% to $77.4m.

The large line item “revaluations” was the major contributor to the bottom line, providing a loss of -$96.7m. NPAT was down substantially coming in at -$51.2m but as previously stated this figure will be lumpy (due to annual revaluations) and is not useful for comparative purposes.

The current ratio is stable at 1.65 and the debt equity ratio continues to rise, slightly to 0.93 on the back of an additional $76m of interest-bearing debt taken on. We note that net finance expenses rose another 11% to $45.2m. Total debt stands at $1,364m.

On the back of the negative revaluation, the NTA of VHP dropped another 8% to $2.47, and the shares trade at a 6% discount to NTA. We note the steady decline of NTA from a high of $3.34 in 2022 to $2.47 now.

Dividends were held steady at last year’s levels, with VHP paying distributions of $0.0975 in 2024. We note that the company is paying dividends well in excess of EPS, and close to operating cashflow. Dividends are distributed quarterly and not all dividends are imputed, largely due to the Australian weighting within the portfolio.

Pages 26-27 of an investor presentation provide some forward-looking guidance. VHP has provided stable dividend guidance of 0.0975 for FY 26.

Shares are tightly held with the top 20 holders, owing a combined 82.96% of VHP.

Resolutions

Angela Bull was appointed to the Board in April 2022. She is an independent director of Property for Industry, Channel Infrastructure, Fulton Hogan, and Foodstuffs South Island. She is also an independent director of Bayleys Corporation and trustee of St Cuthbert’s College. Angela is a former Chief Executive of Tramco Group, a large New Zealand owned property investment company which specialises in large scale land holdings, notably the Viaduct Harbour precinct in Auckland and Wairakei Estate in the Waikato; a former Board member of the Property Council of New Zealand; and a former independent director of the Real Estate Institute of New Zealand and realestate.co.nz.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 12.00pm Tuesday 4 November 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA