Elanor buys Woolloongabba healthcare investment for $37m

Elanor Investors Group (ENN) has paid $37 million for the Woolloongabba Community Health Centre in Brisbane’s inner south.

The asset will be slotted into the unlisted Elanor Healthcare Retail Fund which was established in March and now holds three properties, all in Queensland, worth a total of $161m.

The Sydney based parent controls assets valued at nearly $2 billion.

Last month it paid $60m for Queanbeyan Riverside Plaza east of the Canberra CBD with plans to turn a vacant Target store into a medical centre.

When tenanted, it has been speculated this area could be subdivided and sold to the healthcare fund.

Every year since 2014 ASX-listed ENN, which value-adds, has achieved an average 20 per cent internal rate of return for its realised investments.

Woolloongbabba Community Health Centre

ENN purchased Woolloongabba Community Health Centre at 228 Logan Road on a six per cent yield.

The state government’s Metro South Health Department is the only tenant; the Weighted Average Lease Expiry is 5.4 years.

The property occupies a 4150 square metre site within a major healthcare precinct, close to Princess Alexandra Hospital.

It includes 4966 sqm of space configured with, amongst other fit outs, a 27-chair dental surgery and mental health administration services office. There is also 134 car parks (story continues below).

Elanor Investors Group investment manager Adam Lieutenant (L) and co-head of real estate, David Burgess.

Low risk with options: ENN of Woolloongabba asset

ENN co-head of real estate, David Burgess, said its healthcare trust “delivers superior risk-adjusted returns by investing in commercial healthcare properties where tenants provide vital out-of-public-hospital services.”

“This strategy capitalises on the growing cost pressures on the healthcare system, and combined with advances in health technology, is driving the delivery of healthcare services to lower-cost day surgeries and medical centres,” he added.

“The resilience of the healthcare real estate sector during COVID-19 saw the fund’s portfolio perform exceptionally well during the period.

“Our active asset management of the fund’s assets has already resulted in lease extensions of key tenants.

“Furthermore, there was minimal impact on rental income at the properties, with the fund delivering investors an annualised distribution yield of 7.3 per cent and 7.5pc in the June and September 2020 quarters, respectively”.

ENN said it holds investments in other sectors which have performed strongly during COVID-19 conditions including regional hotels, government-leased offices and retail real estate weighted with essential services tenants.

The Woolloongabba land is zoned to allow for further construction, the landlord added.

Elanor Healthcare Retail Fund was seeded with two Queensland medical centres and day surgeries: 55 Little Edward St, Spring Hill, and Pacific Private at 123 Nerang St, Southport.

The medical centre sits on land with development upside.

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Marc Pallisco

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