HealthCo Healthcare & Wellness REIT (ASX: HCW) and the Unlisted Healthcare Fund (UHF) have issued breach notices to Healthscope after the hospital operator failed to pay all rent due for March 2025. While a partial rent payment was received, HCW and UHF will enforce their legal rights and seek replacement hospital operators if the breaches are not remedied.
Withdrawal of FY25 Guidance
In response, HCW has withdrawn its FY25 Funds From Operations (FFO) per unit and Distribution Per Unit (DPU) guidance of 8.4 cents, pending resolution of the Healthscope tenancy situation. This move was foreshadowed in HCW’s 1H FY25 results release on 14 February 2025.
Financial Position and Support from HMC Capital
HCW has approximately $100 million in cash and undrawn debt facilities. The company also expects to receive additional support from HMC Capital, which has committed to deferring management fees to help mitigate the financial impact.
Strategic Actions and Market Implications
HCW and UHF are in active discussions with alternative hospital operators to take over Healthscope’s leases if necessary. However, the timeline and success of securing replacement tenants remain uncertain, which could impact HCW’s financial performance in the coming months.
HCW’s $1.6 billion portfolio is positioned to deliver stable distributions, long-term capital growth, and a positive environmental and social impact, supported by strong healthcare sector megatrends. The REIT also maintains a large-scale development pipeline, reinforcing its strategic focus on healthcare infrastructure.
The withdrawal of FY25 guidance introduces uncertainty for investors, particularly regarding income expectations for the remainder of the fiscal year. The company’s ability to secure new tenants and manage the Healthscope situation will be key to determining its near-term financial outlook.
