This article is from the Australian Property Journal archive
CHINESE investors are beginning to look beyond development and retail assets in Australia, creating stronger competition for other asset classes and putting downward pressure on yields.
A Narre Warren medical centre has been picked up by a Chinese party on a record yield of 4.97%, trading for $11.68 million.
The prominent 1,602sqm centre at 56 Victor Crescent, on a 4,177sqm site, is leased to ASX-listed Primary Health Care Limited trading as NARREGATE Medical & Dental Centre.
It returns $577,310 per annum, reflecting what CBRE selling agent Sandro Peluso said was a record yield for an asset in the price bracket.
Peluso sold the property with colleagues Josh Twelftree, Rorey James and Kinson Wong.
Kinson said the deal highlighted an emerging trend for Chinese property investors to broaden their investment horizons when investing in Australia.
“Until recently, Chinese groups have focused primarily on development or retail investment assets, however that interest is now widening to include health and child care assets,” he said.
The trend follows rapid growth in China’s middle class, which is expected to account for 76% of the population by 2022, and has influenced offshore investment trends and created increased interest in health and childcare assets.
“In the past 12 months, approximately 60% of the health and childcare related assets we have sold have been purchased by offshore groups,” Kinson said.
The specialised types of assets are being viewed similarly to shopping centres, with typically long-term leases and stable income streams.
He said the lease to an ASX-listed tenant was a key attraction for prospective purchasers of the Victor Crescent property.
Twelftree said buyers in the sector range from small private investors through to high net-worth individuals, syndicators and medical funds.
He said CBRE has seen a surge in investor demand in the $10 million-plus price bracket, highlighted by the recent sale of the Geelong Private Medical centre, with fund managers such as Barwon, Healthley and Australian Unity having been extremely active in this space in recent times.
The Geelong centre sold for a figure speculated to be around $20 million earlier this year, whilst this month Heathley acquired the fully leased Coorparoo Health Care Centre in Brisbane’s inner south-east for $18,083,720, on a 6.25% yield.
This week, Sydney-based Barwon Investment Partners acquired a pathology facility in Heidelberg, in Melbourne’s north-east, for $24.6 million.
The 18 Banksia Street property has 14 years remaining on its lease to Dorevitch pathology, and was acquired with Arena REIT as the manager for the Banksia Street Heidelberg Joint Venture. It followed Barwon’s purchase of the 27,180sqm Dandenong Road, Clayton site on a sale and leaseback deal earlier in the year from Australian Clinical Labs for $20.5 million.
It has an 8,623sqm facility and sold with a 10-year triple-net lease, with tenants also including Healthscope Pathology.
Twelftree added that healthcare and social assistance, including doctors, nurses, dentists, physiotherapists, childcare workers and aged care providers, had made the largest contribution to the nation’s jobs growth over the past 15 years, which was further adding to the appeal of this style of investment asset.
Australian Property Journal
