HealthCo REIT's Deep Discount Hinges on Healthscope's Fate

A 50% discount to net tangible assets reflects uncertainty over receivership-affected tenant Healthscope, with fund managers seeing a genuine path to a sharp re-rating.

2 Jul 2026 · 3 min read

HealthCo Healthcare and Wellness REIT, the major landlord to receivership-affected Healthscope, one of Australia's largest private hospital operators, traded at a 50 percent discount to net tangible assets, with fund managers arguing that resolution of the tenant's ownership uncertainty and reinstatement of the suspended dividend could deliver a re-rating of more than 50 percent and even a special dividend.

A deep discount tied to tenant uncertainty

Blackwattle Investment Partners said HealthCo REIT is a major landlord to Healthscope, one of Australia's largest private hospital operators, which had been in a receivership process for most of 2025 after its private equity owners had over-geared the operating business, putting pressure on the HealthCo share price given uncertainty around the tenant's viability and what its future ownership might look like, with the stock trading up to a 50 percent discount to net tangible assets despite a significant number of parties looking to acquire the operating business.

Healthscope has been in a receivership process for most of 2025, as its current private equity owners had over-geared the operating business. This has put pressure on the Healthco REIT share price given uncertainty around the tenant's viability and what its future ownership might look like. The Healthco REIT has traded up to a 50% discount to NTA.

— Blackwattle Investment Partners, Monthly Report, December 2025

A materially undervalued position with strong catalysts

Phoenix Growth Fund said it had been reducing its Charter Hall holding in favour of adding to discounted REIT names including HealthCo and Centuria Office, buying into HealthCo Healthcare and Wellness REIT while it traded well below its net tangible asset value, with a core view that it is materially undervalued and has strong catalysts this year for the discount to close.

We have been buying into the HealthCo Healthcare and Wellness REIT (ASX:HCW), currently trading well below its net tangible asset value. Our core view is that it is materially undervalued and has strong catalysts this year for this discount to close.

— Phoenix Growth Fund, Monthly Report, December 2025

A path to re-tenanting and dividend reinstatement

Seneca Financial Solutions said that if Healthscope does a deal resulting in its hospitals being re-tenanted and leased to an alternative operator, surely the HealthCo REIT dividend would be reinstated, at which point it questioned why HCW should still be trading at a 50 percent discount to net tangible assets, believing the stock could re-rate more than 50 percent and has the potential to pay a special dividend, with risk mitigated by Healthscope's continued payment of rent on time and in full.

If Healthscope does a deal that results in their hospitals being re-tenanted and leased to an alternative operator, surely the HealthCo REIT dividend is reinstated. At which point, why is HCW trading at a 50% discount to NTA? We think the stock re-rates +50% and has the potential to pay a special dividend.

— Seneca Financial Solutions, Article, July 2026

What fund managers say they are watching next is resolution of Healthscope's receivership process and whether its hospitals get re-tenanted to an alternative operator, whether the suspended dividend gets reinstated, whether the stock re-rates and closes its 50 percent discount to net tangible assets, and continued monitoring of Healthscope's rent payment track record as the key risk mitigant.