HealthCo Healthcare & Wellness REIT (ASX: $HCW) on-market unit buy-back announcement

HealthCo Healthcare & Wellness REIT (ASX: $HCW) has announced its intention to conduct an on-market unit buy-back of fully paid ordinary units for up to $50m. HMC Capital Limited, HCW's largest Unitholder, does not intend to sell units into the buy-back. The proposed buy-back is expected to be accretive to HCW's Funds From Operations (FFO) and NTA per Unit. It will be funded by existing cash, undrawn facilities, and asset sales, as HCW aims to maintain balance sheet gearing at the bottom end of its 30-40% target range.

Executive commentary on the on-market unit buy-back

The buy-back demonstrates our conviction in HCW's value proposition and long-term growth fundamentals. We believe the current unit price presents an attractive opportunity to gain exposure to a high-quality portfolio of critical healthcare infrastructure at a significant discount to NTA. The Board and management team are focused on maximizing Unitholder returns. Based on HCW's current unit price, we believe the buy-back provides the best risk adjusted returns for Unitholders. Importantly, the buy-back will be funded by HCW's ongoing asset disposal program, which will ensure gearing is maintained at the lower end of the 30-40% target range.

Summary of HealthCo Healthcare & Wellness REIT's announcement

HealthCo Healthcare & Wellness REIT (HCW) has announced an on-market unit buy-back of fully paid ordinary units for up to $50m, demonstrating its commitment to proactive capital management. The buy-back is expected to be accretive to HCW's Funds From Operations (FFO) and NTA per Unit and will be funded by existing cash, undrawn facilities, and asset sales. The company's largest Unitholder, HMC Capital Limited, does not intend to sell units into the buy-back. HCW has also successfully executed $145m of its $200m asset disposal program and reaffirmed its FY24 FFO/unit and DPU guidance of 8.0 cents. The guidance does not include the impact of the announced buy-back. HCW is targeting the execution of the remaining ~$55m+ asset sales by the end of FY24. The company's objective is to provide exposure to a diversified portfolio underpinned by healthcare sector megatrends, targeting stable and growing distributions, long-term capital growth, and positive environmental and social impact.