Toronto-based Vital Infrastructure Property Trust has reached a deal to reset leases across a 12-hospital Australian portfolio following the receivership of Healthscope, one of the REIT’s largest tenants.

Calvary Health Care is expected to take over the leases as part of a broader acquisition of Healthscope’s remaining hospital operations. Vital owns a 30% interest in the 12 properties through a joint venture.

The new leases come with a cost. Vital will provide incentives equal to about 13% of annual base rent during the first four years. The revised terms are also expected to reduce the fair value of Vital’s interest in the properties by about 10%.

In exchange, the REIT will extend the portfolio’s lease term by roughly 5.5 years, taking its weighted average lease expiry to about 18 years. The agreements also include stronger annual rent indexation and a fifth-year rent review.

Healthscope was Vital’s second-largest tenant earlier this year, accounting for 6.7% of proportionate revenue. Its parent entities entered receivership in May 2025.

The new leases are expected to begin when the Healthscope transaction closes, currently targeted for Nov. 30. Vital said all rent remains current and the hospitals continue operating.

Pictured: Newcastle Private Hospital in New South Wales, Australia, is part of the 12-hospital portfolio.

Credit: Hansen Yuncken