Investors look beyond lease expiry following Wantirna Health Precinct deal
A relatively short lease didn’t sour investor interest for an office occupied by an essential services provider opposite Knox Private Hospital and the proposed Wantirna Health Precinct.
Also across the road from a KFC and McDonald’s, the two level building on a 1052 square metre Commercial 1 zoned block, 677 Boronia Road, Wantirna, traded last month for $3.75 million, reflecting a 5.65 per cent yield.
With 28 car parks and 715 sqm of modern area, the property is leased to NDIS-approved provider Morcare Services until 2025 with a three year option.
Rent increases three per cent for each of the next two years.
The tenant also picks up the outgoings, including land tax, and pays GST.
Buyers look beyond lease expiry
The Wantirna property previously sold in 2014 for $1.43m.
“This is the fourth recent sale of a healthcare based asset with four years or less remaining…highlighting investor confidence in the continued performance of the healthcare industry, regardless of market cycle,” JLL Healthcare & Life Science’s Mark Stafford, who marketed the asset with Jesse Radisich, Tim Carr and MingXuan Li, said; four offers came in.
“The neighbouring Knox Private Hospital and the future $900m Wantirna Health Precinct underpin the local precinct, with the benefit of new major operators and tenants to be attracted to the area for years to come,” he added (story continues below).
“The healthcare sector continues to be one of the most in-demand asset classes in the market, with investors drawn to the stability of these assets and their operators,” according to the executive.
Two months ago, Australian Unity outlaid $14.75m for Alphington’s former Chronos Care nursing home to repurpose as an acute care hospital pre-leased to Healthe Care.
Not long earlier, the Essendon Football Club launched a leasing campaign for a medical centre it intends to build opposite Windy Hill.
Occupiers are amongst the buyers too; in December, the directors of ONA Medical snared a recently vacated Westpac branch in Seaford, outlaying $1.875m.
Also last year, the Knowles family’s Arcare Group acquired a Ringwood development site for an aged care complex, while Ryman Healthcare snapped one up, in Coburg North.
“2022 saw the healthcare and life science sectors outperforming traditional asset classes, with vacancies of just 0.75pc recorded throughout the year when compared to the 1.87pc, 2.62pc and 1.75pc variance for the office, retail, and industrial sectors,” Mr Stafford said.
The value of Australian product in the sector it dubs Alternative, now circles $235 billion, the agency speculates.
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