This article is from the Australian Property Journal archive
DEXUS has taken another giant step into the healthcare property sector, joining forces with its Healthcare Wholesale Property Fund to acquire the Australian Bragg Centre in Adelaide, the nation’s first proton therapy centre, for $446.2 million.
Also known as SAHMRI 2, the acquisition will increase Dexus’s group healthcare exposure to over $1 billion and grow HWPF’s portfolio to $900 million. They will take a 50/50 split in the partnership.
The transaction is one of the largest single-asset private healthcare acquisitions in Australia.
Vendor Commercial & General was previously Dexus’s joint venture partner in HWPF, before exiting the fund last year to recycle capital ahead of undertaking construction of SAHMRI 2.
The clinical and research facility is within the $3.6 billion BioMed City precinct, incorporating world-class facilities specialising in next generation cancer treatment and for cutting edge research by the South Australian Health and Medical Research Institute (SAHMRI) and lab and office space for SA Health and biomedical companies.
Supported by federal and state government funding, the unit will sit in a purpose-built bunker and be overseen by SAHMRI.
It is presently 77% pre-leased to customers either backed or supported by the South Australian government, with a weighted average lease expiry of 21.9 years from completion in August of 2023.
The purchase agreement includes a two-year rental guarantee provided by Commercial & General over the remaining space to be leased.
Dexus chief executive officer, Darren Steinberg flagged further forays into the healthcare sector for the listed property giant.
“This transaction accelerates the growth of our funds management platform and is a step towards our goal of being a partner of choice in Australian healthcare property,” he said.
“It also increases Dexus’s portfolio diversification, providing exposure to a sector with strong tailwinds.”
In August, HWPF attracted an investment of $70 million from a new domestic institutional investor, and also picked up the College Junction medical centre in Brisbane’s Clayfield for $36.5 million.
The open ended, unlisted healthcare fund was announced in 2017 with intentions of holding up to $800 million, seeded by assets including the Calvary Adelaide hospital.
Last year, Employees Provident Fund Malaysia recently made a $100 million investment into the fund, facilitating its acquisition of the first stage of the $1 billion North Shore Health Hub in Sydney from Dexus. Commercial & General exited the fund shortly afterwards.
“This is an exciting milestone for HWPF that secures a landmark, large-scale healthcare asset, diversifying the fund’s portfolio of high-quality healthcare properties,” Dexus executive general manager, funds management, Deborah Coakley said.
The transaction is expected to settle on 30th October.
