This article is from the Australian Property Journal archive
DEXUS has boosted its stake in the consortium that manages the Royal Adelaide Hospital, and the BioMed City precinct could be in for another new addition with Australian Unity’s Healthcare Property Trust (AUHPT) buying the Newmarket Hotel site across the road for $38.5 million.
AUHPT’s purchase comes shortly after it tapped investors for $350 million to fund new acquisitions and developments.
The 2,646sqm development-ready site at the corner of North Terrace and West Terrace – also a short distance to the proposed new Women’s and Children’s Hospital – was two years ago approved by the state commission assessment panel for two 32-storey towers with 191 apartments and 161 serviced apartments above five levels of office and retail.
The project would incorporate the 1883-built Newmarket Hotel.
Singaporean-backed Adelaide-based developer LGB Australia in 2016 had unveiled plans for a $200 million mixed-use development on the site that were eventually thwarted by the Supreme Court of SA in 2020 due to setback requirements.
Chris Smith, general manager healthcare property, Australian Unity, said the development-ready North Terrace site is a “gateway location for Adelaide’s BioMed City precinct”, a $3.8 billion health and life sciences district.
“Through this investment, Australian Unity will bring its significant experience in healthcare-related development to provide long-term healthcare infrastructure solutions for South Australians”, he said.
“A hallmark of the AUHPT’s strategy over the last twenty years has been its increased involvement in healthcare precincts including in key growth corridors, along Australia’s eastern seaboard. It currently owns private hospitals, medical centres and other healthcare related assets in 18 healthcare precincts”, he said.
AUHPT’s $3.87 billion portfolio includes overnight hospitals, day surgeries, medical centres, pathology centres and aged care properties across Queensland, NSW, Victoria, Western Australia, and South Australia, where its investment footprint currently totals $325 million.
In December, it acquired nine land and residential aged care building sites in South Australia in a $220 million sale and leaseback deal with aged care provider Bolton Clarke.
Meanwhile, Dexus Community Dexus Community Infrastructure Fund (CommIF), Dexus Healthcare Property Fund (DHPF) and AMP Capital Core Infrastructure Fund1 (CIF) have acquired a combined 30.58% interest in Celsus, the consortium that manages and maintains the Royal Adelaide Hospital under a public-private partnership.
Dexus funds now hold a 72.79% stake in Celsius.
The deal is Dexus’ first since completion of the acquisition of AMP Capital’s domestic real estate and infrastructure equity business in late March.
“This further investment into Royal Adelaide Hospital provides our funds investors with a unique opportunity to grow their exposure to healthcare in an asset that we understand and have owned for a number of years,” said Dexus CEO Darren Steinberg.
The deal takes exposure to healthcare on the Dexus platform to more than $3 billion.
The 800-bed Royal Adelaide hospital is being delivered as a 35-year public-private partnership with the South Australian government. Clinical Services at the hospital are provided by SA Health and combine clinical services, training and research facilities.
DHPF has taken a 9.95% interest in Celsus in the deal, its first exposure to a public-private partnership. DHPF has about $1.8 billion of properties.
In 2020, Dexus and its Healthcare Wholesale Property Fund acquired the nearby Australian Bragg Centre – the nation’s first proton therapy centre – for $446.2 million.
