Fund managers trade south Brisbane medical centre
Centuria has sold a commercial investment incorporating the prominent Logan Central Medical Centre, in Brisbane’s south, to Properties & Pathways.
The $12.19 million deal for 295 Kingston Road, on the north west corner of Wembley, demonstrates a 6.78 per cent net passing yield.
It also reflects a capital gain on the $6.45m the seller paid in mid-2005, before retaining it as an effectively fully leased investment.
Cushman & Wakefield’s Mike Walsh and Peter Court with JLL’s Simon Quinn and Thomas Thorsen were the agents.
The asset formed part of a portfolio listed in February with nine medical centres across four states.
Five properties were in Queensland including at Gympie and, in Brisbane, at Chermside, Forest Lake and Mount Pleasant – the latter, 50 kilometres north west of town.
Logan Central is about 22 kms from the CBD.
Logan Central Medical Centre
With 1850 square metres, including the Logan Central Medical Centre, which is anchored to ASX-listed Sonic Healthcare subsidiary IPN Medical Centres, the Pathways & Properties asset returns annual net rent of $827,000; about 350 sqm is vacant.
The majority of leases are tied to inflation rather than CPI.
However the Weighted Average Lease Expiry could be considered short – at 2.7 years.
The agents said the 6130 sqm holding has development upside after that (story continues below).
Neighbouring homes, and opposite Logan Central Plaza, the zoning would allow for a variety of outcomes, they added.
Pathways & Properties is instead expected to retain it as a passive investment; despite most of the 10 occupiers being essential services businesses – a pathologist, pharmacist, podiatrist, radiologist and general medical centre, amongst them – part is rented to Pizza Hut while Freeman Lawyers leases an upstairs office.
The title also includes 44 car parks.
“The non-cyclical income stream and increasing demand, driven by higher life expectancy and an ageing population in Australia, have made healthcare real estate an appealing investment,” Mr Walsh said.
“Furthermore, substantial government investments and the growth of the private health insurance sector have contributed to the expansion of healthcare expenditure in the country,” he added.
“The City of Logan LGA [which the Logan Central Medical Centre sits in] is projected to experience significant population growth in the coming years, particularly within the 65+ age group,” according to the executive.
“This demographic trend is expected to be the main driver for increased demand in medical and healthcare services.
“Properties & Pathways recognises this opportunity and is well positioned to cater to the growing needs of the local community”.
The deal comes eight months since Perth based Properties & Pathways banked $73.5m from a portfolio of six east coast industrial assets – four in Brisbane – held on behalf of 38 investors.
Last March, meanwhile, the manager paid Alceon $16.9m for a double storey office converted gym at Lutwyche, about seven kilometres north of Brisbane.
Subscribe to our newsletter at the bottom of this page.
