Research rates Calan as a buy

Long leases, high occupancy and prospects of a good dividend payout have resulted in one researcher ranking Calan Healthcare Properties Trust as a stock to buy.

Forsyth Barr Research said Calan was "one of our preferred property exposures". Calan chief executive Miles Wentworth said other brokers were also interested in analysing the trust's performance.

"Goldman Sachs JB Were are also likely to pick up coverage in the next two months," he said. "Taking into account our size, we would probably be the most widely covered property stock.

"A key point to note is that we have $9.6 million of non-revenue-producing assets to convert and this will improve trust earnings. In addition to this, we are trading on a 8.8 per cent yield (distribution/stock price) when the average of all property stocks on the NZX is 8.2 per cent.

"We should get a re-rating from the market on conclusion of the conversion of the non-yielding assets."

Forsyth Barr said Calan had further upside after its success in selling non-yielding assets and recycling that cash into yielding assets.

The trust was the only listed property vehicle with healthcare assets.

"These assets typically have high occupancy levels and long lease terms," said Forsyth Barr. Its weighted average lease term was 11.3 years, more than twice the sector average. Yet Calan was trading at an 11 per cent discount to net tangible assets and had forecast a gross dividend yield higher than the average.

Calan's future looked even brighter once its new Melbourne hospital was completed next month, the researchers said.