Vital Infrastructure Property Trust Agrees New Lease With Calvary Health Care for 12 Australian Hospitals

Vital Infrastructure Property Trust (TSX: VITL.UN) announced Sept. 14 that it has agreed terms on a new long-term lease with Calvary Health Care covering 12 Australian hospital properties currently leased to Healthscope Pty Ltd, following a creditor vote that cleared the way for a consortium of hospital operators to acquire Healthscope's remaining operations.

McGrathNicol, acting as receiver for the parent company of Healthscope, confirmed that creditors voted in favor of the consortium proposal. Subject to the execution of definitive documentation, regulatory approvals and completion of an orderly transition, Vital Infrastructure expects Calvary Health Care to become the tenant across the 12 hospital properties. The assets are held through a joint venture in which Vital Infrastructure owns a 30% interest.

Lease Terms and Financial Impact

Under the agreed arrangement, Vital Infrastructure will provide lease incentives equal to approximately 13% of annual base rent during the first 48 months of the new lease. Based on the REIT's 30% ownership interest, those incentives are expected to reduce annualized Adjusted Funds From Operations by approximately C$0.01 per unit during the incentive period.

The lease term across the 12 properties will be extended by approximately 5.5 years, lifting the portfolio's weighted average lease expiry to approximately 18 years. The new lease also includes enhanced annual rent indexation provisions and a rent review mechanism in the fifth year. Vital Infrastructure said the revised lease terms are expected to result in an approximately 10% reduction in the fair value of its interest in the properties.

The new lease is expected to commence upon completion of the consortium's acquisition of Healthscope's remaining hospital operations, which is currently targeted to occur by November 30, 2026, subject to the satisfaction of applicable conditions and receipt of regulatory approvals.

Transition and Operational Continuity

Vital Infrastructure said all 12 Australian hospital properties will remain open and operational during the transition period. As of the date of the announcement, all rent due to the REIT had been paid and Healthscope continued to meet its lease obligations.

Healthscope had entered receivership in May 2025. Prior to the September announcement, Vital Infrastructure had already entered into a conditional lease agreement with Calvary tied to the Healthscope portfolio, pending receiver and creditor approval. The creditor vote clears that hurdle.

Healthscope had been Vital Infrastructure's second-largest tenant, occupying the 12 properties and contributing 6.7% of proportionate revenues for the quarter ended March 31, 2026.

Strategic Context for Vital Infrastructure

"We are very pleased to welcome Calvary, a strong and highly respected healthcare operator, as our long-term partner for this portfolio," said Zach Vaughan, Chief Executive Officer of Vital Infrastructure. "We believe this outcome represents the best result for unitholders, patients and hospital staff. These 12 hospital properties remain an important part of Australia's healthcare infrastructure. The lease arrangement with Calvary provides greater long-term certainty, extends the portfolio's lease duration and positions these properties for continued stability while protecting existing value and providing opportunities to create future value for our unitholders."

As of June 30, 2026, Vital Infrastructure held interests in a portfolio of 104 income-producing properties totaling 11.1 million square feet of gross leasable area across major markets in North America, Brazil, Europe and Australia. The REIT's portfolio spans outpatient, inpatient and health research facilities, characterized by long-term indexed leases.

The Calvary-led consortium also has the support of other healthcare landlords, including HealthCo Healthcare & Wellness REIT and HMC Capital's unlisted healthcare fund.

Market Backdrop

The transaction comes as Australian healthcare real estate continues to attract institutional capital. Population growth, ageing demographics and rising healthcare utilization are supporting demand for medical space, while escalating construction costs and lengthy planning timelines are constraining new supply. Institutional investors have shown sustained appetite for healthcare assets with long weighted average lease expiries and CPI-linked rent escalators — characteristics that Vital Infrastructure emphasized in describing the new Calvary lease terms.

About Calvary Health Care

Founded in 1885, Calvary Health Care is an Australian, charitable Catholic, not-for-profit health, aged care and community care provider. Founded by the Sisters of the Little Company of Mary, Calvary delivers hospital, residential aged care, retirement living and home care services, with a mission focused on providing care to people who are vulnerable or nearing the end of life.

Sources: Vital Infrastructure Property Trust press release, Sept. 14, 2026; Newsfile Corp.