Centuria Healthcare commits to $115m of acquisitions
Unlisted pure play fund portfolio increases to $627m AUM
- Three properties under development, strong pre-leasing commitments from high calibre healthcare operators
- A completed, modern medical centre with recently extended lease terms
- Geographically dispersed acquisitions provide 8.6 year blended WALE and 99% occupancy
- Extends open-ended, unlisted CHPF’s portfolio to 23 assets worth $627m1; 10.3 year WALE, 99% occupancy
Centuria Healthcare Property Fund (CHPF) has secured more than $115 million worth of healthcare real estate. Three assets are currently under construction and capitalise on bespoke, operator-led fit outs, which attract strong tenant covenants and long lease terms. The fourth asset is an $11.3 million medical centre with a recently executed five year lease extension.
The geographically diversified portfolio acquisition of medical centres and mixed use healthcare real estate provides a blended weighted average lease expiry (WALE) of 8.6 years and 100% occupancy.
Andrew Hemming, Centuria Healthcare Managing Director, said, “In the past, healthcare operators have needed to adapt older properties to suit their practice’s needs, which has often led to functional inefficiencies. A good example of this are primary care and allied health providers occupying older residential buildings. The main drawcard for these properties was their location within key suburban settings.
“We are now seeing a change in operators opting for a premise that, within it, contains referral pathways for optimising their business, or are adjacent to or within a healthcare precinct. This new approach builds a strong ecosystem that’s a one-stop-shop for patients requiring referrals, specialist treatments and rehabilitation while enabling operators to create a fully tailored offering where rooms can be set up for specific procedures, enabling a higher volume of patients to be seen.
“Centuria Healthcare is proud to work with high calibre operators to provide real estate that meets their patients’ needs sustainably into the future. Equally, we are pleased to be working with reputable developers with a strong track record in the Australian healthcare real estate sector.”
The acquisitions expand the open ended unlisted CHPF’s portfolio to 23 assets worth $627 million, providing a 10.3 year WALE and 99% occupancy. CHPF is a pure-play healthcare real estate fund.
In late March 2022, CHPF completed its sixth fundraising round, exceeding its initial target of $37 million with investment totaling $50 million.
|Property||State||Value1||Passing yield2||NLA (sqm)||WALE (yrs)2||Occupancy2||Expected completion3|
8 Elizabeth MacArthur Drive, Bella Vista
|Robina Medical Centre
299 Scottsdale Drive, Robina
|Greenfields Medical Centre
50 Montsalvat Drive, Greenfields
|Tandara Medical Centre
168 Corfield Street, Gosnells
|Total / Weighted Average||$115.2m||4.69%||11,263||8.6||100%|
The Bond, Bella Vista
Located at 8 Elizabeth MacArthur Drive, the A-grade medical asset is adjacent to the Norwest Private Hospital and part of the growing healthcare precinct. CHPF has secured eight strata titles within the seven storey, c.10,775sqm4 building. This translates to 53% of the building’s total Net Lettable Area (NLA) providing c.5,700sqm.
Four pre-lease agreements have been secured across 60% of CHPF’s investment in The Bond, including: 1,060sqm across a two-level subterranean oncology bunker let to GenesisCare on a 10 year term; 760sqm let to IVF specialist Dr Antony Lighten on a 15 year term; 680sqm let to psychology allied healthcare provider, Talbots Centre on a seven year term; and 920sqm let to childcare provider, Kinda-mindi on a 15 year term. The balance of the space is secured by a two year rental guarantee.
The Bond is part of a larger master planned precinct being developed by the Mulpha Group. The Bond is being constructed by Buildcorp with completion expected in Q3 2022.
Robina Medical Centre
The 100% fund-through acquisition of Robina Medical Centre/Child Care Facility incorporates a two storey building, which will provide a medical centre, radiology clinic, childcare facility and café. The property, located at 299 Scottsdale Drive, Robina, is 75% pre-leased5 with a 24 month rental guarantee over the remaining 25%. Commitments include 1,183sqm pre-leased to the GP-led Medical on Robina on a 20 year term and 968sqm leased to Green Leaves Early Learning childcare facility on a 10 year term.
The medical centre is being developed by Newlink Property Group and built by the privately owned Queensland builder Platinum Projects (QLD) Pty Ltd. It is located within the Robina health precinct and neighbours the Robina (public) Hospital. The Robina CBD serves as the major hub of economic trade, retail and employment for the southern Gold Coast region supported by a strong residential catchment.
Greenfields Medical Centre
The Greenfields Medical Centre is located south of Perth in the coastal city of Mandurah WA, the state’s second most populous city6. It will comprise a single storey, 1,440sqm2 building complemented by a 50 car on-grade parking. The property is 100% pre-leased, anchored by St John WA7, on a 10 year term. St John WA will provide a full service centre comprising a GP practice, dental, pathology, X-ray and procedure rooms. Additionally, c.140sqm is pre-leased to physiotherapy provider, Jarrad Lethbridge & Life Ready Health Group, on a five year term.
Greenfields Medical Centre will be one of four St John WA Urgent Care centres, a programme backed by Federal Government funding. The property is developed by Auswide International and built by Vespoli Constructions.
Tandara Medical Centre
Built in the 2000s, the single storey medical centre is fully leased to existing Centuria Healthcare tenant customer, Partnered Health Medical Centre. The General Practitioner practice subleases to allied health practitioners providing physiotherapy, pharmacy, pathology and radiology.
CHPF invests across a broad spectrum of healthcare real estate including short stay and day private hospitals, medical centres, specialist centres, mental health and dementia care, medical diagnostics and aged care facilities.
Genera45’s Daniel Steffe acted for Centuria on the Greenfields, Bella Vista and Gosnells acquisitions.
CBRE’s Michael Hedger represented the Robina Medical Centre’s vendor.
1. Values calculated on an as if completed basis. The as is valuation of the current CHPF portfolio is $435 million.
2. Values incorporate rental guarantees
3. Dates by calendar year
4. Space by Net Lettable Area (NLA)
5. By income
6. 80,813 people according to the 2016 census
7. St John WA pre-lease commitment totals 90% by net income of the Greenfields Medical Centre
8. Including exchanged acquisitions and fund-through projects on an ‘as-if complete’ basis
Centuria Capital Group has established a new institutional healthcare partnership through a joint venture with an investment vehicle sponsored by Morgan Stanley Real Estate Investing, to be called the Centuria Prime Partnership.
The Centuria Healthcare Property Fund (CHPF) has further expanded its fast growing portfolio.