Vital Infrastructure Property Trust (VITL.UN) Q1 2026 earnings summary

Executive summary

• Achieved solid Q1 2026 results with 3% year-over-year same property NOI growth, resilient earnings, and strong leasing activity, supported by a diversified healthcare infrastructure portfolio across North America, Australia, Brazil, and Europe.

• Portfolio comprised 105 properties, $5.4B in gross assets, 97% occupancy, and a 13.2-year weighted average lease expiry as of March 31, 2026.

• Closed the Netherlands portion of a 32-property European portfolio sale, with remaining German assets expected to close in Q2; net proceeds of $145 million to be used for deleveraging and growth.

• Reactivated Canadian growth with the acquisition of a 73,000 sq. ft. transitional care facility in Ottawa for $51.3 million and advancing a major development with Royal Victoria Regional Hospital, expected to generate $9 million annual NOI upon completion in 2029.

• Progressing toward a resolution on Healthscope, with a collective proposal submitted to acquire remaining hospitals, potentially securing all assets with a top-tier not-for-profit operator.

Financial highlights

• Same property NOI grew 3% year-over-year to $57.4 million, driven by rent escalations, capital expenditures, higher parking income, and improved cost recoveries.

• Net operating income (IFRS) was $47.5 million, down from $77.1 million in Q1 2025 due to deconsolidation of Vital Trust; proportionate NOI was $58.5 million.

• FFO per unit was $0.11 (up from $0.10 in Q1 2025, down from $0.12 in Q4); AFFO per unit was $0.10 (flat year-over-year, down from $0.12 in Q4).

• AFFO payout ratio improved to 87% from 92% in the prior year.

• NAV per unit was $7.55 as of March 31, 2026, unchanged from December.

Outlook and guidance

• Anticipates further G&A reductions as European platform transitions to TPG, targeting $35 million annual run-rate G&A by end of 2026 (down 25% from 2025).

• Expects leverage to fall below 50% after full receipt of European sale proceeds, with debt to EBITDA projected in the mid-8x range.

• Management expects continued growth in healthcare infrastructure demand, supported by demographic trends and healthcare spending.

• Ongoing portfolio simplification, asset sales, and Canadian development projects are expected to drive future earnings and NAV.

• Plans for several hundred million dollars in new acquisitions in 2026, funded by recycling proceeds and liquidity; short-term leverage may fluctuate but long-term targets remain flat.