Fund Manager Summary
The outlook for Healthco Healthcare and Wellness Reit appears challenging, creating potential opportunities for investors. The fund managers believe that the current situation surrounding their key tenant, Healthscope, is concerning due to increased costs and a heavily leveraged capital structure with $1.6 billion in debt. In their opinion, this uncertainty was validated when Healthco announced that Healthscope failed to make its rental payments in March. Consequently, these factors have led to a full sell recommendation from Oracle Advisory Group, indicating a cautious stance on the Reit's future performance.
Source: Trading View
Commentary From The Managers
Subscribe To Unlock
Date
Price
Summary
Unlock Recent Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Blackwattle Investment Partners
30 June 2025
$0.74
Summary
- HealthCo REIT has seen a decline of 17.4% but remains a landlord of high-quality healthcare properties, including 11 hospitals leased to Healthscope.
- Healthcare properties benefit from consistent demand as they provide essential services to the community.
- Current valuation is trading at a 50% discount to its asset backing (NTA) due to Healthscope's restructuring process.
- The restructuring includes a recapitalisation and sale process that has caused concern among some investors.
- Blackwattle Investment Partners views the administration process as a catalyst for Healthscope to reduce its cost base, which is essential for paying rent and retaining leases.
- Expected rental discounts from HealthCo management are likely to be single-digit changes, paired with lease term extensions.
- Restructuring is anticipated to conclude in the coming months, leading to a potential closure of the NTA discount.
- Upon resumption of full dividends, a forecasted yield greater than 12% per annum is expected at the current share price.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Updates are made available to members within 12 hours in accordance with the ThesisTracker Pro Service Level Agreement.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Blackwattle Investment Partners
30 June 2025
$0.74
- HealthCo REIT has seen a decline of 17.4% but remains a landlord of high-quality healthcare properties, including 11 hospitals leased to Healthscope.
- Healthcare properties benefit from consistent demand as they provide essential services to the community.
- Current valuation is trading at a 50% discount to its asset backing (NTA) due to Healthscope's restructuring process.
- The restructuring includes a recapitalisation and sale process that has caused concern among some investors.
- Blackwattle Investment Partners views the administration process as a catalyst for Healthscope to reduce its cost base, which is essential for paying rent and retaining leases.
- Expected rental discounts from HealthCo management are likely to be single-digit changes, paired with lease term extensions.
- Restructuring is anticipated to conclude in the coming months, leading to a potential closure of the NTA discount.
- Upon resumption of full dividends, a forecasted yield greater than 12% per annum is expected at the current share price.
Summary
Oracle Advisory Group
31 Mar 2025
$0.89
- Oracle Advisory Group sold their investment due to uncertainty around their key tenant, Healthscope.
- Healthscope is facing difficulties from increased costs.
- The company has an over-leveraged capital structure, with $1.6bn in debt.
- The decision to sell was further justified when HealthCo Reit announced that Healthscope had failed to make rental payments in March.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"In an environment where tenant stability is paramount, the struggles of Healthscope raise red flags. HealthCo Healthcare and Wellness Reit appears to be navigating a precarious landscape, making a full sell seem prudent amid rising costs and mounting debt concerns."
Last Updated: 30 Jun 2025
Query The Data
Frequently Asked Questions
Who is investing in Healthco Healthcare and Wellness Reit (ASX:HCW)?
Fund managers including Oracle Advisory Group and Blackwattle Investment Partners have invested in Healthco Healthcare and Wellness Reit (ASX:HCW).
Why do fund managers invest in Healthco Healthcare and Wellness Reit?
Fund managers are cautious about investing in Healthco Healthcare and Wellness Reit due to significant uncertainties surrounding its key tenant, Healthscope. The company's struggles with increased costs and a substantial debt burden of $1.6 billion have raised red flags. The recent failure of Healthscope to meet rental payment obligations further underscores the risks associated with this investment.
What happened to Healthco Healthcare and Wellness Reit (ASX:HCW)?
There have been no recent updates from fund managers regarding Healthco Healthcare and Wellness Reit although fund managers including Oracle Advisory Group and Blackwattle Investment Partners have previously commented.