Monday 1st of September 2003

Calan Healthcare Properties Trust saw profit for the June 2003 year fall by 19.3% and the managing director has resigned. Meanwhile strategic reviews which began months ago are continuing, with some fundamental changes in the wind. Calan has already achieved some fundamental changes to its operations & capital management, which are outlined in its annual result announcement. The trust’s manager “is aware of a number of attractive opportunities for adding a diversified range of properties with quality tenants to the trust’s current portfolio” and “is seeking individual property & portfolio acquisitions in both the public & private sectors that will lead to substantial growth in the size of the trust, and deliver considerable economies-of-scale benefits and add unitholder value,” the trust said. Calan is also looking at its structure & form, including whether it should be a company instead of a trust. The trust’s operating surplus after tax & extraordinaries (none) fell 19.3% to $7.3 million, on an 8.7% revenue fall to $15.4 million and pretax surplus of just over $9 million, down 14.6%. Earnings/unit fell 20.3%, from 6.9577c to 5.5456c. Gross distribution for the year was 8c/unit, which the board said it would try to maintain. Calan said the year-on-year comparison was distorted by significant gains on property sales last year. Calan’s focus for the year was on selling non-strategic or non-yielding assets in favour of properties leased by quality tenants which offer the potential for growth & enhanced returns to unitholders. Founding managing director Martin Lyttelton resigned, effective 30 June, but will remain a non-executive director of the manager. Chief operating officer Miles Wentworth was appointed chief executive and as a director. The board paid tribute to Mr Lyttelton for identifying the opportunity for the private sector to play an important role in the upgrading & modernisation of healthcare facilities and his instrumental role in establishing the Ascot Hospital, “viewed as the pre-eminent private surgical hospital in New Zealand. Mr Lyttelton repeated the exercise in Australia, and created the opportunity for the trust with the development of Epworth Eastern [in Melbourne]. His persistence & vision over the past 10 years have resulted in a portfolio of modern, quality, purpose-built facilities, that represent an A grade investment opportunity for unitholders.” The trust said it had: completed changes to the Ascot Hospital lease arrangements moved quickly towards securing a future return from Epworth Eastern by completing the leasing and starting construction - the $52.6 million project is due for practical completion in October 2004 restructured the rest of its investments to provide a diversified portfolio of quality health sector properties, with quality tenants & assured returns changed the management services, reducing costs conducted rent reviews on 86% of the portfolio, resulting in an average 2.17% increase; occupancy was 98.4% and the average weighted lease term 10.3 years The trust has settled 8 of 10 property sales, realising $26.2 million. The $6.6 million sale of Brighton Private is unconditional and scheduled for settlement in late March. Sale to Metlifecare Ltd of the Waitemata Private site next to North Shore Hospital should go unconditional about January, when resource consent is obtained. Metlife is due to pay $8.5 million of the $12.825 million purchase price then and the balance over 4 years. Calan’s board has contracted out most its property acquisition & development functions, reflecting completion of most current projects and recognising that it will no longer seek to be involved in developments where it acquires land and then shapes up a project.