This article is from the Australian Property Journal archive
WESTBRIDGE Funds Management has capitalised on the demand for medical and allied health real estate assets, selling the Cottesloe Medical Centre in Perth for $11.8 million.
The fund manager initially acquired the centre at 525 Stirling Highway for $4.85 million in September 2004 as part of a single-asset syndicate for their investors. The sale marked a total return of 540% to Westbridge investors, net of initial equity invested, equating to an average annual total return on investment of 29% per annum.
“Throughout the course of holding this asset, we implemented a number of proactive improvements to drive value growth, including rejuvenating the tenancy mix with new ground-floor tenancies, improving fit-outs and resetting leases to offer an attractive weighted average lease expiry (WALE) for future buyers,” said head of commercial funds at Westbridge Funds Management, Alex Lambert.
“Combined with the overall growth of the medical sector, we felt the time was right to sell the asset and wind down this fund to capitalise on strong fundamentals for our investors.”
Perth-based Westbridge Funds Management has just splashed out $15.1 million for the Hampstead Hotel and the adjoining First Choice Liquor bottle shop in Adelaide’s inner north, while last August it bought a Dan Murphy’s-anchored retail complex in Perth’s Southern River for $20.25 million.
Cottesloe Medical Centre provides 1,722 sqm of healthcare accommodation over a two- storey, purpose-built facility. It is anchored by IPN Medical Centres, which has over 160 centres nationally, over 67% the building on a new seven-year lease.
Situated about 10 kilometres from the Perth CBD, the centre boasts a high-profile location on the corner of Stirling Highway and Forrest Street and is adjacent to the Napolean Street retail precinct.
The sale of Cottesloe Medical Centre was handled by JLL’s Nigel Freshwater and Simon Quinn, who said it was the first medical and allied health centre transaction in Western Australia this year and is a sign of Perth’s growing need for high-calibre medical facilities.
Brian Neo from LJ Hooker Commercial acted as advisor on behalf of the purchaser.
The result reflected achieving a yield of approximately 5.71% and a building rate of $6,849 per sqm of net lettable area.
The agents said the sales campaign attracted interest from a large number of buyers looking for a passive investment and seeking a diverse and secure income stream. Eight formal offers were received as a result of the 110 enquiries, with local WA private investors and institutional buyers ultimately dominating the bidder spread.
“Medical and allied health is one of the most tightly held sectors of the WA market and opportunities to acquire such high-quality medical centre assets across Perth, let alone in premium sought-after locations such as Cottesloe, are very seldomly presented to buyers,” Freshwater said.
“Hence the market response to Cottesloe Medical Centre was appropriately aggressive in terms of both engagement and pricing.”
