This article is from the Australian Property Journal archive
THE Australian Unity Healthcare Property Trust (AUHPT) is outlaying $65 million to acquire an eastern Melbourne site and provide development and loan funding for an approved aged care facility, and says it has another $150 million in transactions on the way.
The deal follows the unlisted trust attracting a $180 million cornerstone investment from Dexus in its recent $320 million raising.
Construction on the 177-bed facility is expected to commence later this year on the 12,700 sqm Knoxfield site at Part Lot 77, Bunjil Way, about 33 kilometres from the CBD, with practical completion in mid-2023. The property will be leased on completion to Infinite Care for an initial 25-year term.
AUHPT is paying $10.75 million, excluding acquisition costs, for the site and will provide development and loan funding of up to $54.25 million, subject to financier approval. The loan has been made on a commercial and arm’s length basis and is repayable over four years from operational commencement of the facility.
The trust said it has an additional $60 million of transactions nearing exchange, $90 million in due diligence and several other opportunities in progress.
Chris Smith, general manager – healthcare property, Australian Unity, said Australia’s aged care sector will provide increasingly attractive real estate opportunities for investors in the trust.
“Just last week, the opportunity for investment in aged care real estate was once again made clear in the release of the Intergenerational Report. These critical social infrastructure assets deliver for investors while providing core community services”, he said.
Smith said the Healthcare Property Trust’s Knoxfield acquisition, as well as the recent exchange of contracts to sell all four lots of the Mackay Medical Centre and Day Surgery in Queensland for $16.7 million, at a significant premium to book value, were indicative of the strength of the market and continued capitalisation rate compression.
Eight of the trust’s properties were independently valued during June for a net increase of $1.56 million or 3.65% from the properties’ book value immediately before valuation.
Mark Pratt, executive general manager – property, Australian Unity, said there is considerable opportunity for private capital investment in social infrastructure that meets the needs of the ageing population. More than five million Australians are forecast to be over the age of 70 years old by 2040.
The sector is attracting considerable attention and capital. Dexus added to its exposure last week with the $130.7 million acquisition of the Spring Hill Medical Centre and a car park next to the Herston health precinct in Brisbane’s inner north, following major acquisitions across the country including the Bethesda Clinic in Perth, Monash University’s Faculty of Pharmacy and Pharmaceutical Science in Melbourne, and the Australian Bragg Centre in Adelaide, while the North Shore Health Hub in St Leonards reached completion.
The sector has become increasingly attractive to investors. Home Consortium recently acquired a trio of medical and healthcare assets on the eastern seaboard, taking seed assets for its HealthCo fund to $480 million with plans for an ASX-listed spin-off trust.
Centuria Healthcare will build a new $64 million private hospital in Melbourne’s inner-east after striking an agreement with a doctor-led joint venture with insurer Medibank, and Elanor has made multiple healthcare asset acquisitions in Brisbane and Perth.
AUHPT claims to be the hold the “last remaining scale portfolio of hospital and healthcare assets in the Australian market that remains Australian owned”.
Unitholder returns over the 12 months period to the end of April were 25.09% and five-year total unitholder returns were 14.89% per annum,
“Under its existing ownership and management structure, the Healthcare Property Trust is well placed to continue to invest in this critical social infrastructure and deliver attractive returns for investors, with the trust’s future underpinned by an attractive and deep pipeline of development projects and acquisitions worth more than $1 billion,” Pratt said.
