HMC raises $650m as investors chase alternative real estate

HMC Capital has reached its first successful close on the circa $1.3 billion Healthcare and Life Lifestyles Unlisted real estate fund (UHF).

HMC secured $650 million in equity commitments including $251 million from three major global institutional investors and $322 million from HealthCo Healthcare & Wellness REIT (HCW).

While currently, a fourth institutional investor is undertaking advanced due diligence for the remaining equity commitment.

In the meantime, HMC Capital will provide short-term underwriting support for this amount.

We are delighted to reach first close and welcome a number of top tier major new strategic capital partners for the Healthcare and Life Sciences Unlisted real estate fund,” said Nicholas Harris, head of funds management at HMC Capital.

“This is a high conviction strategy which is benefiting from global megatrends and expected to generate greater investor appetite over time.”

As announced at the time of the Healthscope hospital portfolio acquisition in March, UHF will initially hold a portfolio of seven acute care hospitals leased to leading Australian operator, Healthscope.

With UHF successfully settling on $474 million in Healthscope hospitals in May this year with upfront equity funding support from HCW.

And UHF to settle the remaining $470 million with third party institutional capital early next month (October 2023).

UHF also has a substantial embedded brownfield development pipeline within the existing Healthscope hospitals with an end value of $1.3 billion, based on committed projects.

“The Healthcare and Life Sciences Unlisted real estate fund is a good example of HMC’s ability to source highly strategic acquisitions through unique deal structuring and underwriting,” said David Di Pilla, managing director and group CEO at HMC Capital.

“Today’s announcement also underpins our conviction around growing our healthcare and life sciences platform into a global strategy over time. There is significant and growing institutional investor demand from both Australian and global investors as they actively down weight from structurally challenged sub sectors.”

With a recent survey finding clients of wealth managers, portfolio managers, financial advisors and financial planners having been significantly upping their allocations to alternative investments over the last two years.