AU, Dexus invest again in Adelaide healthcare
Australian Unity has snapped up the city’s prominent Newmarket Hotel and adjoining ex-HQ Complex nightclub with plans to develop a healthcare investment.
The 2646 square metre rectangle shaped block covering 1-8 North Terrace is costing the fund manager $38.5 million.
With the deal, a controversial plan by the vendor, Singapore’s Lee family, for two 32 level towers containing apartments and a hotel, has been shelved.
That said, AU isn’t yet providing details of its proposed development including whether it will form a joint venture with a residential developer to utilise the airspace in a mixed use project.
The group also has a track record of developing high rise investments itself, including an aged care complex which recently replaced its former Melbourne headquarters near Albert Park Lake.
The permit expires in July.
Prime corner
The manager will hold the Adelaide asset in the Australian Unity Healthcare Property Trust which turns 25 next year.
The unique site forms the north west tip of the CBD, opposite the Royal Adelaide Hospital PPP and near the proposed Women’s and Children’s Hospital.
It is also near Lot Fourteen – a master-planned development replacing the ex-Royal Adelaide Hospital, abutting the Adelaide Botanic Garden.
The Lee family paid $10.8m for it in 2016.
The end value of its proposal, which would also have included offices and retail, was put at c$200m.
“The development-ready North Terrace site is a gateway location for Adelaide’s BioMed City precinct,” AU general manager, Healthcare Property, Chris Smith, said.
“Through this investment, Australian Unity will bring its significant experience in healthcare-related development to provide long-term healthcare infrastructure solutions for South Australians,” according to the executive.
“The acquisition further diversified AUHPT’s $3.87 billion portfolio which includes overnight hospitals, day surgeries, medical centres, pathology centres and aged care properties across Queensland, New South Wales, Victoria [and] Western Australia,” the buyer added.
In South Australia, the fund holds assets worth c$325m (story continues below).
“A hallmark of AUHPT’s strategy over the last 20 years has been its increased involvement in healthcare precincts including in key growth corridors along Australia’s eastern seaboard,” Mr Smith said.
“Currently it owns private hospitals, medical centres and other…related assets in 18 healthcare precincts,” he added.
In December, the manager, for the trust, outlaid $220m for nine South Australian aged care investments – eight in Adelaide – offered by Bolton Clarke with a 20 year leaseback.
Dexus ups RAH stake
Also today, Dexus confirmed it acquired an additional 30.58 per cent interest in Celsus Holdings, the consortium which manages and maintains the six year old Royal Adelaide Hospital PPP.
The manager made the purchase on behalf of the Dexus Community Infrastructure Fund (CommIF), Dexus Healthcare Property Fund (DHPF) and AMP Capital Core Infrastructure Fund (CIF) – the latter, which it has controlled since March.
With the agreement, Dexus trusts control 72.79pc of Celsus.
The institution also now holds just over $3b of healthcare product.
“This further investment into the Royal Adelaide Hospital provides our fund investors with a unique opportunity to grow their exposure to healthcare in an asset that we understand and have owned for a number of years,” Dexus chief executive officer, Darren Steinberg, said.
“The 800-bed RAH, delivered as a 35 year PPP with the South Australian government, is one of Australia’s most advanced hospitals,” according to the executive.
“Clinical services at the RAH are provided by SA Health and combine clinical services, training and research facilities to deliver high quality and complex patient care”, he added.
Following the latest investment, CommIF controls 58.69pc of Celsius, DHPF owns 9.95pc, while CIP gains a 4.15pc stake.
Dexus trusts own the nearby Australian Bragg Centre too, construction of which topped out last week; also known as the SAHMRI 2 building, it is set to be the country’s first proton therapy unit specialising in cancer.
The fund manager has also since 2021 been a cornerstone investor in AUHPT.
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