Centuria divests $22.8m healthcare portfolio

The Parkwood asset is about 10 kilometres north west of Surfers Paradise.

RAM Asset Management has picked up two more medical centres from Centuria Healthcare.

On the Gold Coast, the investments include the Highlands Health Centre at 95 Alexander Drive, Highland Park (pictured, top), which is costing $8.5 million, reflecting a 6.23 per cent net yield.

The Nundah property is trading to a private investor for $6.9 million.
RAM Asset Management recently paid $20.5 million for 1/36 Edmondstone Road, Bowen Hills.

The second property – 306 Olsen Avenue, Parkwood, is trading for $7.4m – a 5.75pc net return.

The acquisitions come a week since the pair traded two more healthcare investments – at Perth and Mildura – for a total of c$16m.

RAM will hold the properties in its Essential Services Property Fund (REP) which launched last month.

Also for this trust, earlier this week, the manager spent $20.5m on a Bowen Hills (Brisbane) asset – 1/36 Edmondstone Road, not far from the Royal Brisbane and Women’s Hospital.

Divesting smaller assets

Both Gold Coast properties are leased to IPN Medical Centres.

They were listed mid-year with a Brisbane asset – 1220 Sandgate Drive, Nundah – which is selling to a private investor for $6.9m at a 6.22pc net yield.

Colliers’ Tom O’Driscoll, Ryan Chandler and Chris O’Driscoll brokered the deals.

“A total of 10 formal offers were received for the properties following the five week campaign…with the competitive bids moving into four rounds of shortlisting” Brisbane based Tom O’Driscoll said, adding that it was the first time he has experienced that.

“Interest in the healthcare sector is running strong, especially in growth areas around south east Queensland,” according to the executive.

“The response from our expressions of interest campaign from a range of prospective buyers, especially from interstate, demonstrated the demand for this class of assets in prime locations” (story continues below).

In September, Centuria paid $60.5 million on a funds through basis for Townsville’s Weststate Private Hospital.

Centuria upsizes

Centuria has in recent years been reweighting its healthcare portfolio with larger assets.

In September, for its Healthcare Property Fund (CHPF) the manager paid $167m for seven investments, including Townsville’s unbuilt Weststate Private Hospital (for $60.5m), the Perth Clinic ($50.5m) and Sunbury Medical Centre ($28.6m).

Eight months ago the manager outlaid $23m for the Coffs Harbour Specialist Centre, $21.6 on the Cairns Day Surgery and $12.7m for Brisbane’s Murrumba Village Medical Centre.

Last year – soon after CHPF was launched – Centuria picked up two short stay hospitals – Orange’s Bloomfield Medical Centre, for $55.5m and, in Melbourne, the Vermont South Medical Centre ($51.7m).

It later re-committed the anchor tenant at Vermont South.

In 2018, Centuria paid $20m for the former Cotham Private Hospital, which was subsequently let to a consortium including Medibank.

That seller, Hamton, offered the 2245 sqm plot in Melbourne’s leafy exclusive Kew permit-ready for a residential project.

“Healthcare property across Australia is fast becoming the alternate asset class of choice,” Chris O’Driscoll said.

“With a general lack of quality stock, low interest rates and a significant amount of capital, we are experiencing a time in the market where this defensive asset class is experiencing unprecedented yields,” he added.

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Marc Pallisco

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