The strong demand for alternative property assets has been put on display with investors pouring almost $300m into the country’s largest unlisted healthcare property fund.
The Healthcare Property Trust, run by Australian Unity, is one of the largest hospital owners in the country, as players including Dexus and Centuria expand their own holdings.
US group Medical Properties Trust and Canada’s NorthWest Healthcare Properties Real Estate Investment Trust have also forged into the area.
Australian Unity’s $2 billion vehicle is one of the largest unlisted healthcare REITs in the country and raised the $291 million in equity from new and existing investors to fund acquisitions and its development pipeline.
It already manages a portfolio of 55 healthcare-related property assets that include hospitals, medical centres and aged care facilities.
The trust has a development pipeline of some $675 million. Current projects include the $390 million Surgical, Treatment And Rehabilitation Service in Herston, Queensland, a $28m upgrade to Peninsula Private Hospital in Langwarrin, Victoria and a $22 million expansion at Beluera Private Hospital in Mornington, Victoria.
The trust will also acquire six aged-care properties leased to Infinite Care for 25 years, as well as a loan to assist with the fit out of the properties. The six new aged care properties are located in south-east Queensland and Cairns.
The area is still a focus and the royal commission into the area which could force owner-operators of aged-care homes to offload their real estate in order to upgrade and meet rising standards.
Australian Unity head of healthcare property Chris Smith says there is “significant scope” to undertake development work with longstanding tenants and hospital operators across the trust’s portfolio.
“Our current and future developments enable us to put in place long-term leases with committed tenants that provide vital services to the community and a clear pathway to consistent returns for investors,” he says.
Australian Unity’s executive general manager, property, Mark Pratt, says investors’ positive response to the trust’s reopening demonstrates support for the company’s investment approach, experience and history of delivering for investors in the sector.
The trust has more than 12,000 investors and in 2017, the trust raised $420 million in new equity to fund acquisitions and the trust’s development pipeline.
The trust’s wholesale units produced a total return of 10.33% per annum over the past decade, and total returns of 11.07% over one year, 13.27% per annum over three years and 13.02% per annum over five years.
This article originally appeared on www.theaustralian.com.au/property.
