Healthco Healthcare & Wellness (ASX: HCW) has finalised an agreement for Bethesda Health Care to take over the operation of Mount Private Hospital.
This key transition is backed by the WA State Government, which will provide financial assistance to Bethesda to facilitate the transition and ongoing operation of the hospital.
Adding further support, WA Health will contract the hospital facilities for services such as elective surgeries to help relieve public waitlist pressure.
Healthscope will surrender its existing lease, paving the way for Bethesda to commence a new long-term lease in Q1 FY27.
Notably, the face rent for Mount Private Hospital will remain unchanged.
Healthscope Lease Agreements Progressing
Beyond Mount Private, the receiver-led process for alternative operators across the remaining 27 Healthscope hospitals continues.
These operators have now been granted a due diligence period as transaction documentation progresses for continuity of service and an orderly transition.
Healthco and its Unlisted Healthcare Fund have already executed new lease agreements for 10 other Healthscope hospitals with various operators, including Healthe Care in Victoria, Acurio Health in New South Wales, and KnG Healthcare in Queensland.
Crucially, Healthscope has fulfilled its obligations by paying 100% of all rent due across all HCW and UHF owned assets up to and including May 2026.
Financial Health and Strategy
Healthco's underlying financial position remains robust. The company reported gearing at 28.5% as of December 2025, which is below its target range of 30-40%.
It also maintained a strong liquidity position with $155 million in cash and undrawn debt at that time.
The company's development pipeline, estimated at approximately $500 million, is currently on hold.
It is not expected to be unlocked until the Healthscope situation is fully resolved and funding partners are secured.
Healthco's Path Forward
The agreement for Mount Private Hospital marks a significant step in resolving Healthscope's lease issues.
That said, the full resolution of the Healthscope situation and the impact of rental incentives on valuations remain key areas for investors to monitor.
While face rent for Mount Private remains unchanged, the new lease agreements across the portfolio include rental incentives that are expected to imply a 10-15% near-term portfolio rent reduction, based on December 2025 capitalisation rates.
Despite progress, the receiver processes for other hospitals may still introduce timing and term uncertainty until documentation is finalised.
