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Groundbreaking new short-stay hospital – Townsville

Andre Bali

Development begins on North Queensland’s newest private hospital

  • $60m Weststate Private Hospital breaks ground at former Townsville West State School site
  • Focused on lowering out-of-pocket expenses; main procedures: orthopaedics e.g. joint replacements
  • Four operating theatres, one procedure room, 19 day beds and 22 overnight beds
  • 100% occupied1 to a new, local surgeon/medical group on 25 year lease2
  • Two acre site amalgamates six land parcels; purpose built, five storey healthcare development.

Construction has started on North Queensland’s newest private hospital with the $60 million Weststate Private Hospital, Townsville, breaking ground as development partners, Centuria Healthcare and Geon Property, marked the significant milestone with the hospital operator, Weststate Private Hospital (Weststate).

Located on the corners of Wilson Street, Lamington Road and Sturt Street, the hospital amalgamates six land parcels into a single two acre site3, providing a five storey, purpose-built property, complete with four operating theatres, one procedure room, 19 day beds and 22 overnight beds.

The entire property is pre-leased on a 25 year term to a newly established operator, Weststate Private Hospital Limited (Weststate), which includes three founding specialist surgeons as well as a cohort of medical professionals and investor associates.

Weststate is focused on industry leading patient care and lowering out of pocket expenses for patients. Procedures will predominately focus on orthopaedics, such as joint replacements, as well as sub-specialties across urology, ophthalmology, endoscopy, general surgery, gynaecology, oral, ears-nose-throat (ENT), neurosurgery, hepatobiliary, vascular and bariatric treatments.

Part of the development will breathe new life into the heritage-listed building that was once the Townsville West State School. The iconic building was also used as military encampment and convalescent ward during WWII. The historic building will be transformed into specialist consulting suites and will include a new footbridge link to the new short-stay hospital.

Andrew Hemming, Centuria Healthcare Managing Director, said, “Delivering this new private hospital improves and complements the existing health infrastructure within the North Queensland community. Townsville is growing at a fast pace and its population is forecast to increase 38% by 20414. More specifically, its 65 years and older age group is expected to double during this time. This creates additional demand for healthcare services, particularly for an ageing population who require more care and surgical procedures such as hip replacements.

“Centuria Healthcare has been part of the Townsville health community for a number of years and we are proud to expand our presence within North Queensland through our partnership with the well regarded Geon Property and the Weststate professionals.”

Ben Griffin, Geon Property Director, said “Geon Property has an unbroken run of development activity in Townsville, which dates back to 1998. It is a proud history of engagement with the community and delivering projects. Geon is particularly proud to be breathing life back into one of Townsville’s most loved heritage buildings in the form of the West End State School. We look forward to starting its next chapter.”

Dr Peter McEwen, Weststate Private Hospital Limited Founding Surgeon, said, “Fundamentally this project is about choice and value for our patients, our colleagues and the organisations that pay for health care. We think it’s a great use of a beautifully constructed historical building and a vital addition to regional infrastructure.

“It will be the first fully digital greenfield private hospital in the country we’ll use that digital framework to drive quality and efficiency. Centuria has been great to work with and we look forward to a long and rewarding partnership.”

Weststate’s three founding specialists include orthopaedic surgeons, Dr. Peter McEwen and Dr Kaushik Hazratwala, and urologist, Dr Kiran Hazratwala. Weststate is chaired by David Kippin and Neil Henderson has been appointed as Weststate’s interim CEO.

Construction of the Weststate Private Hospital will proceed throughout a 16 month period with completion expected in 2024.

Queensland-based construction company, Woollam Constructions, is the appointed building contractor. The company has a 138-year history and delivered more than $550 million of projects in the past five years. Some of its current healthcare real estate projects include the Sarina Hospital Redevelopment and Fraser Coast Mental Unit, Hervey Bay. Previous projects include Rockhampton Alcohol and Other Drug Residential Rehab Facility (2021), Gladstone Hospital Emergency Department (2020), and Townsville Private Clinic Stage 2 (2020).

Andre Bali, Centuria Head of Development added, “Centuria Healthcare is pleased to join local Queensland property group Geon Property on this new landmark private hospital development. Partnering with local expertise in development to deliver regional healthcare infrastructure is a model Centuria is replicating nationally.

“Where practicable and appropriate, Centuria works closely with stakeholders to deliver sustainable development outcomes, and this development is no different. Re-purposing and upgrading old buildings is challenging but, together with Geon Property and the support of Weststate, we have been able to make this possible here at Weststate Private, minimising waste, maximising re-use and reducing the overall carbon footprint of the development.”

Weststate Private Hospital is located in the suburb of West End, c.1.3km from the Townsville CBD. It is within 250m of the Townsville Train Station and in close proximity to two bus stops on the corner of Church Street and Ingham Road.

Townsville has the largest population base in northern Australia and its economy is supported by agriculture and mining resources, Australia’s largest military base, a port-based trade, and the James Cook University.

On completion, the short-stay hospital will be owned by the unlisted, open-ended healthcare real estate fund, Centuria Healthcare Property Fund (CHPF), which has a geographically diversified portfolio of 34 assets worth $645 million5 and a 13.6 year Weighted Average Lease Expiry (WALE)6.

CHPF provides daily unit pricing, limited quarterly withdrawals and a liquidity event every five years. The unlisted fund has provided an 14.0% total return during the past 12 months.

(Pictured: Ben Griffin, George Bogiatzis, Andre Bali, and Dr Peter McEwen)

1. Occupancy at practical completion.
2. 25 years at practical completion.
3. Amalgamated landholding totals 7,944sqm encompassing six existing lots. The land has “mixed-use” zoning.
4. According to the 2016 Census which predicts a population increase for the Townsville catchment from 235,037 in 2016 to 324,317 by 2041
5. CHPF’s portfolio includes direct and indirect interest in Nexus Property Unit Trust, assets on an as if complete basis and exchanged acquisitions to be settled as at 31 December 2021.
6. As at 31 December 2021 and includes rental guarantees.
7. Limited to the terms detailed in the PDS and are subject to the CHPF’s liquidity policy. The ability of CHPF to offer quarterly redemptions is not guaranteed.
8. One year return on an annualised basis to 31 December 2021. Annualised total return figures are the sum of the annualised income return and the annualised capital return (each calculated on a standalone basis), Past performance is not a reliable indicator of future performance.
9. Including exchanged acquisitions and fund-through projects on an ‘as-if complete’ basis.