Top funds team up for $585m health and life sciences hub in Sydney

St John’s College at the University of Sydney.

Industry superannuation fund-backed fund manager ISPT has teamed up with the heavyweight Australian Retirement Trust with a scheme to develop a $585m health and life sciences hub in Sydney’s inner-city Camperdown.

The pair have won the rights under a 99-year lease from St John’s College at the University of Sydney to develop the centre, which will become a key part of the emerging precinct.

The 6000sq m site at Missenden Road, Camperdown, which sits between the Royal Prince Alfred Hospital and the university, is becoming a key locale for healthcare services, medical research and education institutions.

The property is in the broader Camperdown Health, Education and Research Precinct, which is developing rapidly and aims to foster growth and innovation across top medical institutions and organisations.

ISPT and Australian Retirement Trust will develop a $585m health and life sciences hub in Sydney.

The Missenden Road facility will span 30,000sq m of space for uses ranging from an acute private hospital, consulting suites, specialist medical occupiers, such as pathology and diagnostics, education and medical research and life sciences organisations.

Other investors are also active in the area. Real estate investor Wentworth Capital last year struck up a partnership with the University of Sydney to develop a $500m life sciences hub at its Camperdown precinct. That property will be transformed into a 30,000sq m Biomed, Science and Innovation Campus housing more than 1200 biomedical, clinical and industry researchers and scientists.

The latest project is a 50-50 joint venture between the ISPT Core Fund, which has been selling down more traditional properties, and ART, via a mandate with ISPT, and their complex is to be finished in 2029.

The precinct capitalises on the dramatic growth in demand for healthcare services as the population ages, with health spending forecast to more than double to $270bn by 2035.

The complex will be ISPT’s third health and life sciences project, bringing its overall healthcare-related portfolio to $1.4bn as it also has the Health Translation Hub at UNSW in Sydney and Brenan Place, in St Vincent’s Fitzroy Hospital, in Melbourne.

ISPT wants to expand its portfolio via exposure to both public and private health services, education and medical precincts, research facilities, seniors living and care, and life sciences.

ISPT head of development, healthcare, life sciences and education Jason Lourensz said the site’s location in the Camperdown Health, Education and Research Precinct was “highly advantageous”.

“The last few years have demonstrated why world-leading healthcare, research and pharmaceutical spaces are an absolute necessity, underpinning our desire to deliver more state-of-the-art healthcare facilities that can be co-created with key tenant partners to deliver higher levels of customer care, innovation and operational efficiency,” Mr Lourensz said.

ISPT acting head of funds management Doug Cain said the core fund was co-investing alongside ART.

“Given strong, underlying market drivers, we view healthcare and life sciences as a highly defensible asset class, and as we continue to grow our mandate business by delivering bespoke strategies and opportunities for our investors, this transaction demonstrates our ability to bring in capital partners to execute on our sector strategy,” Mr Cain said.

ART head of real estate Mark Lee said picking up on market trends was critical in investing. “Australia’s population is ageing. In combination with an increase in life expectancy thanks to modern medical advancements, and overall population growth, these trends naturally lead to an increase in demand for domestic healthcare services, which is why Australian Retirement Trust sees value in this space,” Mr Lee said.