This article is from the Australian Property Journal archive
THE Centuria Healthcare Property Fund (CHPF) has bought more than $115 million worth of under-construction healthcare assets and a medical centre on the east and west coasts.
Bought on a yield of 4.69%, the portfolio has a blended weighted average lease expiry (WALE) of 8.6 years and 100% occupancy, including rental guarantees, and takes the unlisted fund’s assets under management to $627 million.
Headlining the deal is the purchase of eight strata titles within The Bond, next to the Norwest Private Hospital in Sydney’s Bella Vista, for $66.2 million. The Bond is within a larger master-planned precinct being developed by the Mulpha Group and completion is expected in the September quarter.
CHPF’s slice totals 5,659 sqm, covering 53% of the A-grade development, and traded on a yield of 4.5% with a 7.9-year weighted average lease expiry. Four pre-lease agreements have been secured across the investment, including GenesisCare over a 1,060 sqm subterranean oncologist bunker, an IVF specialist, a psychology allied healthcare provider and childcare centre Kinda-mindi. There is a two-year rental guarantee over the balance.
In a 100% fund through acquisition, CHPF has bought the Robina Medical Centre and childcare facility on the Gold Coast for $27.5 million. Currently being developed by Newlink Property Group, the 2,868 sqm facility is 75% pre-leased to GP-led Medical on Robina on a 20-year lease and Green Leaves Early Learning, and also has a two-year rental guarantee over the remaining space. It is within the Robina health precinct and neighbours the public Robina Hospital.
Andrew Hemming, Centuria Healthcare managing director said that healthcare operators had in the past needed to adapt older properties to suit their practice’s needs, which has often led to functional inefficiencies.
“A good example of this are primary care and allied health providers occupying older residential buildings. The main drawcard for these properties was their location within key suburban settings.
“We are now seeing a change in operators opting for a premise that, within it, contains referral pathways for optimising their business, or are adjacent to or within a healthcare precinct.
“This new approach builds a strong ecosystem that’s a one-stop-shop for patients requiring referrals, specialist treatments and rehabilitation while enabling operators to create a fully tailored offering where rooms can be set-up for specific procedures, enabling a higher volume of patients to be seen.”
Two purchases were also made in Western Australia. The fully pre-leased Greenfields Medical Centre in Mandurah, bought for $10.3 million at 5.15%, will be anchored by St John WA on a 10-year term, providing a full-service centre with a GP practice, dental, pathology, X-ray and procedure rooms. It will be one of four St John WA Urgent Care centres as part of a federal government-backed program.
The completed asset in the portfolio is the Tandara Medical Centre in south eastern Perth, acquired for $11.3 million. Built in the 2000s, the 1,269 sqm building sold with a 6.7-year WALE with a recently signed five-year lease extension, and is fully leased to existing CHPF customer Partnered Health Medical Centre.
Both WA assets traded on a 5.15% yield.
Genera 45’s Daniel Steffe acted for Centuria on the Greenfield, Bella Vista and Gosnells acquisitions, while CBRE’s Michael Hedger represented the Robina Medical Centre’s vendor.
CHPF’s portfolio comprises 23 assets with a 10.3-year WALE and 99% occupancy. The fund last month completed its sixth fundraising round, exceeding its initial target of $37 million with investment totalling $50 million.
Centuria Capital Group has been active in the healthcare sector of late. Last week it tipped nine healthcare real estate investments to the market, with expectations of $140 million, with the properties held in the unlisted closed-ended fund, Centuria Healthcare Direct Medical Fund No. 1.
Last month, it launched the institutional healthcare real estate joint venture Centuria Prime Partnership with Morgan Stanley Real Estate Investing, and over summer made $466 million worth of healthcare acquisitions on both sides of the Tasman in a deal that included CHPF.
