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Centuria launches $133m open-ended, unlisted healthcare fund

Today Centuria Capital Group (ASX:CNI or “Centuria”) has launched an unlisted, open-ended healthcare fund with six seed and pipeline assets1 worth $133 million that benefit from 100% occupancy2 and a portfolio WALE of 6.7 years2.

The fund, known as Centuria Healthcare Property Fund (CHPF), has a starting distribution yield of 5.75%3. It will provide monthly distributions4, a limited quarterly withdrawal facility5, daily applications and offer a minimum entry investment from $10,000.

CHPF’s specialised investment criteria is to secure assets providing cost-effective models of care, with a particular focus on short-stay hospitals, day hospitals and medical centres offering complementary tenancies that create healthcare ecosystems.

Jason Huljich, Centuria Joint CEO, said “Centuria has started FY21 in a strong position, having already acquired c.$700m of real estate. The launch of this healthcare fund adds to our momentum. We believe healthcare is an attractive asset class, characterised by long leases, high occupancy rates and growing demand for its services.

“We’ve had strong success with our other unlisted, open-ended fund having launched the Centuria Diversified Property Fund (CDPF) in 2017. This new Fund delivers further opportunities to our deep distribution network and we expect CHPF to be an attractive opportunity for the major platforms, advisers and individual investors.”

Andrew Hemming, Centuria Healthcare Managing Director, said, “Healthcare assets have remained resilient throughout the current COVID-19 period, underpinned by constant demand. More broadly, healthcare is a growing real estate sector due to Australia’s ageing population and rise of chronic diseases, such as diabetes.

“The strong performance of this asset class, coupled with its relatively low volatility compared to other property asset classes, has driven significant investor demand6. We are meeting this demand appetite with the launch of CHPF. We intentionally selected these assets, not only because of their strong property attributes, but they are tenanted by trusted, well-performing healthcare operators with strong covenants.”

Centuria Healthcare will seek to raise c.$97 million to launch the Fund. Applications for units in CHPF must be made pursuant to a PDS which is available on Centuria’s website.

  1. The Fund has acquired a Medical Centre in South Bunbury, WA and has exchanged contracts on a fund-through development in Murrumba Downs, Qld. The Fund is currently in exclusive due diligence on four other healthcare assets.
  2. As at 30 June 2020. Includes rental guarantees. For the WALE of 6.7 years, this assumes 85% interest for three properties currently in exclusive due diligence.
  3. The advertised starting distribution rate is calculated on an application price of $1.000 per unit and is therefore subject to change. The advertised starting distribution rate is from October 2020. The advertised starting distribution rate is not a forecast, and merely represents the distribution rate the Fund intends to distribute from October 2020. It is therefore predictive in nature and is subject to assumptions (including the assumption that the pipeline assets will be acquired by the Fund), risks and circumstances (both known and unknown) outside of the control of Centuria Healthcare Pty Ltd and Centuria Property Funds No. 2 Limited. The actual returns may differ from the starting distribution rate. Centuria Healthcare Pty Ltd and Centuria Property Funds No. 2 Limited do not guarantee the performance of the Fund, the repayment of capital or any income or capital return. The actual distributions paid in cents per unit will be updated on a monthly basis and made available on this website.
  4. Distributions will be paid if declared by Centuria Property Funds No. 2 Limited and will be subject to the terms set out in the PDS.
  5. Withdrawals are limited to the terms detailed in the PDS and are subject to CHPF’s liquidity policy.
  6. Each sector has different characteristics and risks. The risks, volatility and returns for healthcare differ to a geared healthcare property fund.