Centuria banks premium from WA medical centres

The five year old Sundew Day Surgery contains 1525 square metres.
The Joondalup block spreads 2368 square metres with 25 car parks.

Centuria has sold two small Western Australian medical centres acquired three and a half years ago to seed the Healthcare Property Fund.

The Forrest Family Practice site spreads 2920 square metres with 59 car parks.

Subiaco based Westbridge Funds Management is the buyer.

The South Bunbury property, with 890 square metres including a chemist tenancy.

The priciest asset, the Sundew Day Surgery at 24 Sundew Rise, Joondalup, 25 kilometres north of Perth, is trading for $13.7 million – a 6.2 per cent yield.

Centuria outlaid $12.7m when the asset was a yield old.

Fully leased to Nexus, the weighted average lease expiry is 5.7 years.

The occupier then has two five year options.

The second property, the Forrest Family Practice at 120-122 Spencer Street, South Bunbury, 100km south of Mandurah, sold for $7.25m reflecting a 7.3pc return.

The seller paid $6.4m.

ForHealth is the occupier. The WALE is 7.13 years. Rental growth is linked to CPI.

A potential minor refurbishment should up the income and therefore capital value, the buyer said.

Westbridge will hold the investments in the Total Return Fund which launched last February targeting a four year timeframe depending on market conditions.

Including Joondalup and South Bunbury, the manager has now bought five assets spending just over half its c$100m mandate.

In Adelaide’s Collinswood, this includes the Hamstead Hotel and six neighbouring shops – one standalone, leased to First Choice Liquor – which early last year set the group back $15.1m – a 5.6pc return – from Coles Group (story continues below).

Westbridge bought an Adelaide hotel and shops for the Total Return Fund.

Last November a Lytton, Brisbane, cold storage facility, costing $6.17m, was added to the book.

One trust to another

Westbridge sold the Cottesloe Medical Centre last year.

Westbridge head of Capital Transactions, Simon Worth, said the two medical centres meet the fund’s “dual strategy” criteria of earning income while offering medium term growth prospects, in this case via exposure to high demand specialist sectors.

Midland Central recently traded for $19.3 million.

“The Sundew Day Surgery and Forrest Family Practice add blue chip income streams to the Total Return Fund to support consistency of distributions while also capitalising on what we believe is a softening in the cycle for Australia’s sought after medical sector,” he added.

“The construction of new specialised medical facilities has fallen behind the access requirements of Australia’s growing and ageing population,” he added.

“At the same time, rising construction and labour costs to both build new facilities and replace existing facilities will continue to exacerbate the scarcity of these vital infrastructure assets, underpinning strong medium term growth potential,” according to the executive.

CBRE’s Derek Barlow with JLL’s Simon Quinn and Nigel Freshwater were the agents.

Their deals comes 13 months year since Westbridge sold the Cottesloe Medical Centre for $11.8m on behalf of a 19 year old syndicate.

That deal, to private investors, reflected a 5.71pc return.

Last September meanwhile, the manager sold the Midland Central Shopping Centre, 17km north east of Perth, for $19.3m – a rise on the $12.3m it outlaid in 2012 for a single asset trust – and a 6.4pc yield.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.