NorthWest strikes Brisbane, Melbourne deals
GIC and NorthWest Healthcare Properties have purchased Kippa-Ring’s Peninsula Hospital from Healthscope.
As part of the leaseback deal, the landlords will extend and renovate the facility (pictured, top); on 1.46 hectares at 89 George Street, on the south west corner of Florence, it contains 70 beds, two theatres and a procedure room.
The upgrade is scheduled to start early next year and take about 18 months.
The overall outlay is expected to reach c$110 million.
The deal comes three years since the partnership acquired a half interest in Healthscope’s $2.5 billion, 22-hospital portfolio, which was also offered with a leaseback (New York listed Medical Properties Trust purchased the balance).
Kippa-Ring is 27 kilometres north of Brisbane.
Another deal for trio
The Kippa-Ring asset will be held by a trust established four years ago by the Canadian listed healthcare giant and Singapore sovereign wealth fund with a $2 billion mandate, but quickly doubled.
In March, GIC tipped another $2.4b to the fund; it also controls a greater share than NorthWest – 70 per cent – of the 2019 Healthscope hospital portfolio.
The partnership has over 10 projects under construction too including hospitals backed by Epworth in Victoria, at Richmond and Geelong.
At Kippa-Ring, NorthWest executive director Richard Roos said demand for medical services exceeds supply.
“The opportunity to acquire the Peninsula Private Hospital…was highly appealing for NorthWest given the quality of the [facility] and its catchment in conjunction with the compelling opportunities to further upgrade the facility and expand its existing services” he added.
“Our expanded partnership with Healthscope will deliver enhanced healthcare services to Australians in need,” according to the executive.
“Long term ownership and partnerships like this are at the core of NorthWest’s business model and we look forward to enhancing Peninsula Private’s journey”.
Frankston deal detailed
Meanwhile NorthWest, in a joint venture with Dr Michael Merrett and Dr Vinod Ganju, has assigned operations of the former Frankston Private Hospital and adjacent specialist centre to the state government, which will run it as a public facility (story continues below).
Though the deal has been mooted all year – the occupier moved in three weeks ago – a statement last week confirmed the initial term is 15 years.
The agreement also includes converting two procedure rooms into operating theatres, capital works expected to be completed early next year.
The facility will focus solely on day surgery; there will be no emergency department, NorthWest said.
Imaging, radiotherapy and pharmacy services provided by I-Med, GenesisCare and Slate will continue onsite, it added.
Frankston is a major activity centre 40 kms south of Melbourne.
Better outcomes for patients: NorthWest
Mr Roos said the lease assignment will result in better outcomes for patients.
“Together with our two joint venture doctor partners, we are pleased to collaborate with the state government to expand and enhance the healthcare offering to Victorians and support their $1.5b effort to address the elective surgery backlog in the state, which was exacerbated by the COVID-19 pandemic,” he added.
“At NorthWest, we believe the future of healthcare in Australia will be defined by enhanced collaboration between the public and private sectors, along with research and biotech, to facilitate a more integrated health ecosystem,” according to the executive.
“Our specialty is in combining complementary facilities and facilitating collaboration between services and healthcare sectors to enhance the quality and capability of healthcare available – with this initiative at Frankston Private eliciting a great example of how collaborative and flexible health systems can work together to achieve better outcomes for patients”.
NorthWest is the largest owner, manager and developer of Australian healthcare product with a c$6.7b portfolio and c$2.8b development pipeline.
In Australia, it operates another major partnership with NZ listed Vital Healthcare which last year acquired investments at Campbelltown and Kellyville, in Sydney.
That pair also paid $93m for The Tennyson cancer centre at Adelaide’s Kurralta Park in February.
Earlier this month, NorthWest independently spent a speculated $11m on a vacant aged care home in Melbourne’s Mount Eliza.
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