Australian Unity collects c$65m from medical centres
Australian Unity has sold two modern essential services assets held by the $3.8 billion Healthcare Property Trust.
In the most recent deal – the first for the sector this year – the Corrimal Medical and Dental Centre, seven kilometres north of Wollongong, is trading to a private investor for a speculated $20 million – or book value – a yield of just under six per cent.
ForHealth is the sole tenant – it, under the former owner, Healius, committed to the 1496 square metre single storey building at 46-50 Underwood Street for 15 years upon completion in 2017.
General practice, radiology, pathology, dental and physiotherapy functions are undertaken there.
Biggest deal since 2021
The second property to sell, the Manningham Medical Centre in Lower Templestowe, 14km north east of Melbourne, collected $45m from a local private investor in a deal struck late last year.
That result makes it the largest sale of its kind nationally since 2021, CBRE’s Sandro Peluso, who marketed both properties with Marcello Caspani-Muto and Jimmy Tat, said.
Based on the gross passing income – $2.9m from a mix including Nexus Day Hospitals, Sonic Healthcare and Capital Radiology – the six storey, 5000 sqm c20 year old renovated asset, 200 High St, traded on a 6.4 per cent yield.
On 8376 sqm at the north east corner of Manningham Road, the investment also has 215 car parks
Australian Unity general manager, Chris Smith, said sale proceeds will be tipped into longer term stable asset streams (story continues below).
Queasy sector on the mend
Not immune to the rising interest rate backdrop, the essential services sector – a darling during COVID – had a more tepid 2023.
“While several high quality healthcare assets were marketed over the course of 2023 in Australia, as of January, 2024, less than 35pc have transacted with many citing increased costs of capital for institutional purchasers as the root cause,” Mr Peluso said.
“We expect a broader increase in healthcare clearance rates in 2024 inline with broader positive market sentiment,” he added.
“Many institutional and private investor groups are taking a long-term view on both interest rates and commercial property more broadly…they appreciate that the rare buy-side opportunity for investors of this quality may be short lived,” according to the executive.
“For our team, a focus on high-net-worth investor transactions will remain key as these groups have the liquidity to reduce any downside associated with higher borrowing costs”.
With reduced development volume, Mr Caspani-Muto said, demand will outstrip supply driving better pricing outcomes.
“Many investors across both private, syndicated and institutional capital see strong medium to long term upside in acquiring assets now,” according to the executive.
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