Centuria, Morgan Stanley form healthcare fund

The Westside Private Hospital at Taringa.

Centuria has formed a joint venture with Morgan Stanley Real Estate Investing to acquire and develop healthcare product.

The Centuria Prime Partnership will be seeded with three assets from the former’s development pipeline, worth a total of $210 million.

Centuria will act as property and project manager.

MSREI holds a 90 per cent stake.

“We are very pleased to announce our partnership with MSREI, which provides another opportunity to utilise our strong in-house healthcare real estate capabilities and further broadens our access to additional capital sources,” Centuria joint chief executive officer, Jason Huljich, said.

Centuria established a healthcare arm in 2019 following its 63pc investment in Healey Limited.

Two years ago, the manager established the Centuria Healthcare Property Fund which now holds 21 assets worth a total of more than $550m.

Centuria Prime Partnership

At $97m, the Westside Private Hospital at Taringa, five kilometres south west of Brisbane, is the priciest of the seed assets.

Operated by Montserray Day Hospitals, part of Healius Limited, it includes four theatres, an infusion chemotherapy clinic, seven overnight beds and 73 room medi-hotel.

A second Queensland asset, the Mater Private Hospital in Townsville, is setting CPP back $38m.

This property includes the Icon Cancer Centre, Queensland X-Ray branch, four theatres and 34 beds.

In Melbourne, the trust will hold the Adeney Private Hospital, which is set to replace the ex-Cotham Private Hospital, in Kew. (story continues below)

Upon completion next February, this facility will offer 30 beds, four theatres and, like Westside, an infusion chemotherapy hub.

Worth $75m, it will be managed by Medibank.

Healthcare assets under management approaching $2b: Centuria

Combined, the assets are 99pc tenanted offering a 12 year Weighted Average Lease Expiry.

“Since 2019, Centuria has significantly grown its healthcare assets under management to approximately $1.7 billion by focusing on…real estate models of care that are cost effective and deliver better patient care for our high-quality operational partners,” Centuria Healthcare managing director Andrew Hemming said.

“We will continue to focus on the acquisition of institutional grade properties as well as developing out our $900m healthcare pipeline,” he added.

Another player

MSREI joins some major players in the Australian essential services space, amongst them Charter Hall, which manages the $1.9b Social Infrastructure REIT.

Australian Unity and Dexus recently formed a partnership to focus on healthcare property, but each independently manage funds focused on this asset class.

NorthWest Healthcare Group, via its New Zealand listed Vital Healthcare Property Trust, Barwon Investment Partners and Real Asset Management, care of its Essential Services Property Fund, have also been active investors in this space since last year too.

Last year, HMC Capital, the new name for Home Consortium, or HomeCo, floated an essential services trust – the HealthCo Healthcare & Wellness REIT, which holds 40 assets worth a total of c$800m. 

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Marc Pallisco

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