Japara lists two more aged care investments

Japara is offering the Bonbeach asset with a six year leaseback.

After recently selling a Springvale aged care centre as an investment, Japara – one of the country’s largest industry service providers – is offering two more.

The agency it has appointed – Savills – has even thrown in a multi-storey facility it is co-marketing on behalf of a private investor, to create a near $30 million portfolio.

Renovated two years ago, the Bonbeach facility is licensed with 65 places.

All of the properties are bayside and priced somewhat similarly ($8.6-$10-million-plus).

Japara would take the lion’s share.

In March the operator sold two holdings: the Springvale Aged Care Facility at 340-344 Springvale Road for $13.4m, to a private investor, and a permit-ready 122-bed nursing home site in Highton, Geelong, to Multicultural Aged Care Services, for $3.6m.

Last July it spent $10m on a 1998 sqm site – three neighbouring houses – abutting its Elanora Aged Care complex in Brighton.

Investments by the beach, with redevelopment prospects

Japara’s smallest asset (pictured, top) is in Capel Sound – the name of Rosebud West since 2016 – about 94 kilometres drive south of Melbourne on the Mornington Peninsula.

The vendor is offering starting annual rent of $525,000 on a six year lease.

With three options, each of four years, it can stay until 2038.

The 58-bed complex sits on 4290 sqm of General Residential 1 zoned land at 12-16 Capel Avenue, near Rosebud Hospital.

Assuming the investment sells on a six per cent yield – price expectations are c$8.8m.

In Bonbeach, a southern bayside suburb, 57kms closer to the city than Capel Sound, 440 Station Street (pictured above, right) was refurbished two years ago and returns annual net rent of $600,000.

With 65 places, it occupies a 3066 sqm General Residential 2 lot.

This property is anticipated to sell for more than $10m (story continues below).

The third investment, a 60-bed two storey aged care home in Parkdale – 23kms south of Melbourne, is being offered with a lease expiring in 15 years when the occupier can exercise the first of two five-year options.

The 2004 sqm GRZ2 site at 43-45 Herbert Street (pictured, bottom) is land tax exempt and expected to trade for more than $8.6m.

Longer term, the agents said, the zoning would allow for alternative uses, including townhouses.

Amicum’s John Newman and Glen O’Brien are marketing Parkdale with Savills’ Julian Heatherich, Mark Stafford and Benson Zhou.

Economic conditions don’t drive demand for aged care investments

About 3.8 million Australians – 15 per cent of the population – are aged 65 and over, the agents said, pointing to Australian Institute of Health and Welfare research.

By 2057, this will have increased to 8.8m and eighty years from now, be 12.8m.

“Unlike many other industries or uses whereby demand and levels of trade can be influenced and determined by economic conditions and external market influences such as internet retailing, aged care services are an essential need and one which is unlikely to dissipate or be undermined,” Mr Heatherich said.

Mr Stafford added the industry is a non-discretionary service.

“As the population profile in Australia continues to increase, so too does the requirement for these services”, he said”.

“As such, government funding to the sector also continues to grow”.

Unlike comparable commercial property investments, aged care facilities are occupied by major national, often listed companies, with substantial financial backing and the opportunity to secure more, Mr Zhou said.

“The aged care industry comprises a large number of highly reputable tenants often secured by long-term leases, ensuring high standards of upkeep and building maintenance for your property in order to meet the regulations and safety standards outlined by the Victorian and federal government”.

The Bonbeach facility (outlined) is walking distance to the beach.
The Parkdale facility (outlined and bottom) contains a 60-bed facility leased for 15-years with two five year options.
Parkdale Aged Care at 43-45 Herbert Street.

Share or Recommend article

Marc Pallisco

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

Marc Pallisco