INSIDE:

BUILDING A HEALTHY FUTURECEO David Carr on a strong interim result

ACQUISITIONSScale and diversification in action

DEVELOPMENT PIPELINEThe latest on work within the portfolio

NEW TEAM MEMBERVickie Li joins the Vital team in Melbourne

VITAL UPDATEMARCH 2017

BUILDING AHEALTHYFUTUREDEAR INVESTOR

In this Vital update you will see that we have started2017 as we finished 2016, with a very strong portfolioand financial position. This continues to provide theplatform to execute on our scale and diversificationstrategy, further enhancing distribution sustainabilityand long-term value creation.

Strong interim results

We announced our interim results on 23 February,which are detailed in the enclosed Interim Report. On23 March 2017 investors will receive a second-quarterdistribution payment of 2.125 cents per unit withimputation credits of 0.0914 cpu attached. Interimresult highlights include:

• 12 month total return to 31 December 2016 of13.7%, outperforming the S&P/NZX All Real EstateGross Index return of 2.7%

• Market leading weighted average lease term toexpiry (WALE) of 17.6 years providing long-termincome certainty, supported by occupancy at 99.0%

• Increases on rents reviewed of 1.2%

• Interim revaluation gain of $13.1m, and Vital’sweighted average capitalisation rate (WACR)firming to 6.9%, reflecting portfolio quality,attractive characteristics of healthcare real estateand strong investor demand

• Acquisition of two medical office buildings (MOBs)in Melbourne and Sydney for A$55m

Scale and diversification

Diversification and flexibility for growth is an importantpart of Vital’s plan and since the strongly supportedcapital raising in July we have acquired two qualityMOBs. The first of these was Mons Road MedicalCentre in Westmead, Sydney, for A$30.7m and thesecond was a majority interest in Ekera MedicalCentre, in Box Hill, Melbourne, for A$24.4m. You canread more about these two assets in the acquisitionsarticle in this update.

We have also completed a number of acquisitions ofstrategic sites around existing core assets to protectand enhance the long-term value of these propertiesby supporting tenant growth requirements.

Continuing development programme

The brownfield redevelopment programme remainscentral to Vital’s scale and diversification strategy. Itunderpins earnings sustainability, improves assetquality and enhances long-term value.

In the period we completed A$18.3m of brownfielddevelopments at Dubbo Private Hospital in New SouthWales and South Eastern Private Hospital in Victoria.Please have a look at our website to see photos of thefantastic new development at South Eastern, alongwith great photos of the entire portfolio.

We have a further five development projects underwayand you can read more about these in the developmentsection in this update.

Outlook

We continue to see demand for healthcare servicesand associated infrastructure increase due topopulation growth and ageing trends.

With a strong balance sheet we continue to workthrough a range of potential opportunities, building onour defensive growth profile and further strengtheningour focus on sustainable distributions and long-termvalue creation.

The Board has re-affirmed its previous distributionguidance for the year ending 30 June 2017 of 8.5 centsper unit. I look forward to keeping you updatedthroughout the year.

Kind regards

David Carr, Chief Executive Officer

ACQUISITIONSSince our update in September wehave continued with our scale anddiversification strategy andacquired two new assets.

Mons Road Medical Centre

Mons Road Medical centre,located in the Westmead medicalprecinct is approximately 26kilometres west of the SydneyCBD. Acquired for A$30.7m, MonsRoad was built in 2010 and is amodern, multi-tenanted, four-level medical office building.

Mons Road comprises a mix of highquality healthcare tenantsincluding Castlereagh Imaging,one of the largest networks ofradiology practices in NSW, andIVF Australia, owned by ASX-listedVirtus Health. Both of thesetenants are new to the Vitalportfolio, diversifying our tenantmix and establishing newrelationships on which to build.

The Westmead medical precinct isconsidered Australia’s largesthealth services precinct. Itincludes Ramsay Health Care’sWestmead Private Hospital, theWestmead Public Hospital,Westmead Children's Hospital andCumberland Public Hospital.

The Westmead precinct is set togrow further over the medium-term with the NSW Premierannouncing in September 2015 aA$900m Westmead PublicHospital redevelopment fundingpackage to take place over the nextfive years.

Ekera Medical Centre

In November we acquired amajority interest in Ekera MedicalCentre in the Box Hill suburb ofMelbourne for A$24.4m.

Constructed in 2014, Ekera is amodern, multi-tenanted four-level

medical office building withbasement parking for 133 cars.

Ekera’s major tenant is ImagingAssociates. Other tenants includeSonic Healthcare, Monash IVF andSportsmed Biologic.

The Box Hill medical precinctincludes the recently redevelopedBox Hill Public Hospital and Vital’sown Epworth Eastern Hospital andMedical Centre. Box Hill isexperiencing significant growthwith a number of large-scaleresidential towers beingdeveloped, driving a materialincrease in population for the area.Ekera will support the delivery oflong-term growth options at Vital’sEpworth Eastern campus.

DIGITAL DEVELOPMENTS

Vital's website

You may have noticed last year thatwe made some improvements toour website. We set out to improveyour experience with betterwebsite functionality and moreregular updates.

New features include videos on thehomepage, more images, easier tonavigate menu options andquarterly updated portfoliometrics. This all means that youcan keep up to date with theportfolio more easily and see foryourselves our newest acquisitionsand latest developments as theyoccur. The site has also beenoptimised for mobiles and tablets,so whatever your preferred way ofgetting online, Vital has youcovered.

The website address remains thesame: www.vhpt.co.nz so go andcheck it out!

Webcasts

We have also started recordingwebcasts of our interim and annualresults. This means that in additionto being able to see thepresentation and financialstatements online at results timeyou can also listen to CEO DavidCarr and CFO Stuart Harrison talkyou through them, giving furthercontext. Head to the news andpublications page on our websiteand filter by webcasts to listen tothe most recent ones.

LinkedIn

Also new for Vital is a recentlycreated LinkedIn page for regularVital updates and industry news.It's a great way to keep up to date

with Vital's activities and weencourage you to follow us. Justsearch for Vital HealthcareProperty Trust on LinkedIn to findus.

“As technology developswe are finding new waysof communicating withour investors, ensuringthat they are kept up todate with all of ouractivities in the best andmost efficient waypossible.”David CarrChief Executive Officer

“Ekera and Mons Road are both excellent additions to our portfolio, delivering asset and tenant diversification to Vital.”David Carr, Chief Executive Officer

MONS ROAD MEDICAL CENTRE

A$30.7MEKERA MEDICAL CENTRE

A$24.4MTOTAL INVESTMENT PROPERTIES

32

> MONS ROAD MEDICAL CENTRE

DEVELOPMENT PIPELINECompleted developments

Late last year we completed two developments. Firstwas the A$3.7m project at Dubbo Private Hospital inNew South Wales, which has expanded capacity tocore services and modernised the property. Secondwas the A$14.5m development at South EasternPrivate Hospital in Victoria. South Eastern is locatedaround 26 kilometres south-west of Melbourne’s CBDand this development has resulted in a brand new unitwith 60 mental health beds and 79 car parks. As youcan see from the photo below this is a high qualityasset. Head to our website to see more images.

Currently in development

The newest project to the pipeline is a A$6.3mdevelopment at Palm Beach Currumbin Clinic inQueensland. Palm Beach is a 104-bed hospital and

has a catchment area that extends into New SouthWales.

“The project at South Eastern hascreated real value and is a greataddition to the hospital.”Mark NormanNational Development Manager

The new development project at Palm Beach willresult in the relocation of consulting to new suites andthe conversion of all double rooms to single rooms. Itis forecast to be completed by October 2017.

Check out the pipeline below for a reminder of theother projects we have in progress.

DEVELOPMENT PIPELINE

LINGARD A$23.8m

MAITLAND (STAGE 1) A$13.6m

TORONTO A$9.4m

PALM BEACH A$6.3m

SPORTSMED CONSULTING A$9.5m

Certain projects remain subject to Development Approvals

2016JUL JUL JULAUG AUG AUGSEP SEP SEPOCT OCT OCTNOV NOV NOVDEC DEC DECJAN JANFEB FEBMAR MARAPR APRMAY MAYJUN JUN

2017 2018

> SOUTH EASTERN PRIVATE HOSPITAL

TEAM PROFILE:VICKIE LIVickie Li recently joined our Australian-based teamin Melbourne as a Property Accountant.

As part of this busy role Vickie is involved withaccounts payable, accounts receivable andaccounting for tenant transactions. She also speaksregularly with tenants regarding any questions theymay have.

Before joining our team, Vickie was a companyaccountant at RPM Real Estate Group and has sixyears’ experience in the real estate industry. Vickieis a Certified Practising Accountant with CPAAustralia and has a Master of Finance fromMelbourne University.

“I find the property industryfascinating and this move intohealthcare property is a new and exciting chapter for me.”

Vickie has a young family and outside of work enjoysvisiting farms, zoos and parks with her children,travelling in Australia and having a good old Aussiebarbeque with friends.

> VICKIE LI

> CLAIRE HIGGINS

2016 ANNUALMEETINGThe Trust’s Annual Meeting was held on10 November 2016 at Auckland’s Pullman Hotel.Thank you to all who attended.

Just one resolution was presented at the meeting.Unitholders voted by 99.95% in favour ofreappointing Claire Higgins as IndependentDirector.

We’ve added the Chairman and CEO presentationsto the website, so if you weren’t able to attend themeeting, you can bring yourself up to speed. Go towww.vhpt.co.nz, select ‘News & publications’ andthen filter by 'Presentations' and '2016'. You willthen see the ‘2016 Annual Meeting Presentation’.

PORTFOLIOMETRICSAs at 31 December 2016

NUMBER OF PROPERTIES

32OCCUPANCY

99.0%

WALE

17.6YEARS

Weighted Average Lease Term to expiry (WALE)Leading the market with a WALE that far exceeds the sector average

Year

s

15.1

17.1

18.417.6

6.6

Jun-14 Jun-15 Jun-16 Dec-16 Sector avg*0

5

10

15

20

*Source: Forsyth Barr Real Estate Reflections December 2016. NZ listed property excluding VHP.

Portfolio geographic compositionWell diversified by geography

New South Wales 34%Victoria 22%Auckland 14%Queensland 13%NZ ex-Auckland 6%Western Australia 5%South Australia 4%Tasmania 2%

Ten-year total return performanceWell-executed strategy providing long-termvalue for investors

Inde

x re

base

d to

100

S&P/ASX 200 REIT Index S&P/NZX All Real Estate GrossVHP S&P/NZX 50 Index Gross

2008 2010 2012 2014 20160

100

200

300

400

Source: Craigs Investment Partners as at 31 December 2016

Ten-year lease expiry profileAverage lease expiry per annum over the nextten years of 2.0%

Leas

e ex

piry

by

inco

me

(%)

0.7

1.6

5.5

4.7

1.2

0.4

1.2 1.1

3.5

0.00.2 0.3

2.01.4

0.40.1

0.61.0

1.6

0.0

Total expiry Largest single expiry

Jun 17 Jun 18 Jun 19 Jun 20 Jun 21 Jun 22 Jun 23 Jun 24 Jun 25 Jun 260

2

4

6

8

10

12

Keep up to date with all Vital events and information atwww.vhpt.co.nz

The Trust's financial year is 1 July to 30 June. Our calendar below showsevents, publication dates and distribution dates for the next six months. Thisis updated regularly on our website as some dates are subject to change.

Quarter two distribution payment 23 March 2017Quarter three distribution payment June 2017Annual result announcement August 2017

ContactsManager Unit Registrar

Vital HealthcareManagement Limited

Level 16, AIG Building41 Shortland StreetAuckland 1010PO Box 6945Wellesley StreetAuckland 1141New Zealand

T 0800 225 264F +64 9 377 2776E enquiry@vhpt.co.nzW www.vhpt.co.nz

Computershare InvestorServices Limited

159 Hurstmere Road, TakapunaAuckland 0622Private Bag 92119, Auckland 1142New Zealand

Managing your unitholding online

To change your address, update yourpayment instructions and to view yourinvestment portfolio includingtransactions, please visit:www.computershare.co.nz/investorcentre

vital@computershare.co.nzT +64 9 488 8777F +64 9 488 8787

Please assist our registrarby quoting your CSNor shareholder number.

This newsletter is for information purposes only. Its content is intended to be of a general nature, does not take into account yourfinancial situation or goals and is not a personalised financial adviser service under the Financial Advisers Act 2008. It is recommendedthat you seek advice from a financial adviser which takes into account your individual circumstances before you acquire a financialproduct. No part of this publication may be reproduced without prior written permission of Vital Healthcare Management Limited.