This article is from the Australian Property Journal archive
THE NorthWest Healthcare Properties REIT and Epworth Healthcare are planning a $600 million innovation, education and healthcare precinct in Victoria’s Geelong, and will also be expanding the Epworth Richmond rehabilitation hospital close to the Melbourne CBD.
NorthWest has made a suite of purchases totalling $127.6 million across three deals with Epworth to facilitate the developments. They include a 50% interest in the Epworth Geelong in Waurn Ponds for $89.8 million, and a half-share in the 4.2 hectares of land adjoining the hospital that will become home to the new health precinct for $15 million.
The Canadian group also took a 100% interest in Epworth Elim facility in Richmond for $22.8 million, plus a further $5 million option for the air rights to further develop the site.
Each of the deals were struck with triple-net leaseback agreements with initial 20-year terms to Epworth, which will retain control over the hospital functions at the sites and work with NorthWest on development plans.
Dr Lachlan Henderson, Epworth Group chief executive, said the agreement frees up capital, supporting long-term growth and innovation.
“The agreement enables Epworth to focus on targeted growth, our ambitious digital program and innovation to deliver better outcomes for our patients, now and in the future.”
Patient services will continue as normal.
President and CEO of Australia and New Zealand for NorthWest, Craig Mitchell said the group would develop a multi-staged masterplan for the 4.2 hectare Geelong parcel, and look at development opportunities at Epworth Elim at Richmond.
“This is an exciting transaction for NorthWest as we expand our partnership with Epworth HealthCare to further enhance healthcare services for the people of Victoria,” Mitchell said.
Epworth has similar long-term arrangements with NorthWest in place at Epworth Freemasons, Epworth Camberwell and Epworth Eastern.
NorthWest has over $5.5 billion in healthcare and infrastructure assets under management. Its Vital Healthcare Property Trust recently paid $9.4 million for a development site within the Coomera health precinct that has been earmarked by Queensland Health for a new public hospital to service the state’s fast-growing south east.
Meanwhile, Adelaide’s new 14,000 sqm purpose-built state-of-the-art laboratory for SA Pathology is on its way with an advanced tender notice being released. The new facility will be built within close proximity to Adelaide’s hospital and medical research precinct, with the Royal Adelaide Hospital and the new Women’s and Children’s Hospital
Healthcare is becoming increasingly attractive for property players. The Dexus Health Healthcare Property Fund has been particularly acquisitive, with the the Bethesda Clinic fund-through development in Perth among its purchases.
HomeCo’s new healthcare REIT made its ASX debut to a huge investor welcome, while asset and wealth manager Real Asset Management Group has just launched a $521 million real estate investment trust.
