HealthCo Secures WA Government-Backed Lease for Mount Private Hospital

Government Guarantees New Operator for Mount Private Hospital

HealthCo Healthcare & Wellness REIT (ASX:HCW) has clinched a pivotal agreement for the Mount Private Hospital in Western Australia, with Bethesda Health Care stepping in as the new long-term operator. This deal comes with a financial guarantee from the WA State Government, which will also provide support to Bethesda to smooth the transition and ongoing operations. The hospital’s facilities will be contracted by WA Health to provide elective surgeries and help ease public hospital waitlists, reinforcing the public-private healthcare interface.

Lease Transition and Commercial Terms

Under the agreement, Healthscope will surrender its existing lease, allowing Bethesda to commence operations in the first quarter of FY27. The face rent on the Mount Private Hospital remains unchanged, with rental incentives consistent with HealthCo’s earlier disclosure from February 2026, which indicated a 10-15% near-term reduction in rent on a portfolio basis to ensure commercial sustainability. This arrangement aims to maintain income stability for HCW and its unlisted healthcare fund (UHF) partner, while supporting continuity of service and jobs for hospital staff.

Progress on Other Healthscope Hospital Transitions

Meanwhile, Healthscope’s receivers have granted due diligence periods to alternative operators for the remaining 27 hospitals in the portfolio, excluding those already undergoing transition or operated under management contracts. HCW and UHF have executable lease agreements in place for 10 other Healthscope hospitals with operators such as Healthe Care in Victoria, Acurio Health in New South Wales, and KnG Healthcare in Queensland. These commercial terms align with the February 2026 disclosure, reflecting a consistent approach across the portfolio. Notably, no formal proposals have yet been received concerning the so-called 'PurposeCo' lease model.

Healthscope has maintained full rent payments on all HCW and UHF owned assets through May 2026, a continuation of the trend reported in April 2026, which helped stabilise cash flows amid ongoing operational uncertainty. This rent compliance underscores the commitment to meet obligations despite the receivership scenario and supports HCW’s efforts to reposition its portfolio for growth and distribution normalization.

Management Commentary on Strategic Positioning

HMC Capital’s Managing Director, Real Estate, Sid Sharma, described the Mount agreement as a crucial step toward resolving the Healthscope situation, highlighting the value of government backing in reducing portfolio risk. HCW Fund Manager Christian Soberg emphasised the deal’s alignment with HCW’s objectives of service continuity and job preservation, while anticipating that the stronger tenant covenant will enhance long-term unitholder value.

The agreement for the Mount Private Hospital follows a series of strategic moves by HCW to navigate the Healthscope receivership, including prior announcements of rental incentives and lease negotiations. It builds on the company’s resilient portfolio management, as detailed in its half-year results and recent rent payment confirmations, positioning HCW to mitigate tenant risk and support its healthcare real estate platform’s recovery and growth trajectory.