This article is from the Australian Property Journal archive
IN one of the first healthcare transactions of the year, Australian Unity has offloaded Corrimal Medical Centre in Wollongong for $20 million.
Located at 46-50 Underwood Street, Corrimal, the purpose-built 1,496 sqm centre is fully leased to and occupied by Healius Limited on a 15-year term. It was completed in January 2017 and provides services including general practice, radiology, pathology, dental and physiotherapy.
CBRE’s Australian Healthcare and Social Infrastructure team of Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto brokered the deal on behalf of Australian Unity, with the deal aligning with book value.
Caspani-Muto said that while several high-quality healthcare assets were marketed throughout 2023 in Australia, as of January less than 35% have transacted with many citing increased costs of capital for institutional purchasers as the root cause.
Australian Unity’s general manager of healthcare property, Chris Smith said, “The sale reflects a passing yield of sub-6% and is a solid result for the trust in the current climate.”
“Our continued focus is on optimising our portfolio construction, including strategically recycling capital from the sale of shorter WALE assets into longer-term stable income streams for our investors.”
Peluso said, “We expect a broader increase in healthcare clearance rates in 2024 in line with broader positive market sentiment. Many institutional and private investor groups are taking a long-term view on both interest rates and commercial property more broadly.”
The healthcare property sector is bound for further growth this year, with investors remaining confident despite approaching challenges in the broader economic landscape, according to Knight Frank.
“There is a substantial volume of private capital in the market who can compete at price points beyond $50 million and we still see these purchasers as the key drivers of successful outcome until the interest rate environment stabilises,” Peluso said.
