RAM Group acquires first investment for new medical property fund
Real Estate Management Group (RAM) has established a medical property fund and acquired a Queensland asset for $11.25 million.
The Brisbane-based wealth and management firm, which has more than $300 million of assets under management following the acquisition of 12 convenience shopping centres since 2016, is looking at investments priced between $5 million and $100 million for its new trust, Australian Medical Property Fund.
RAM head of real estate Will Gray said the company would target established medical-anchored facilities in major population hubs including coastal cities and inland towns.
It would also seek to partner with developers to create new medical-anchored facilities “which could deliver higher risk-adjusted returns for the new fund and its investors”.
Mr Gray said the group has been looking at opportunities in this sector for more than 12 months.
“Any asset we look at needs to have at least 50 per cent of rental income from medical-related tenants,” Mr Gray said. “This could include GP clinics, day hospitals, overnight hospitals, specialist facilities or allied health providers such as dentists, physiotherapist or ancillary medical service providers such as pharmacies”.
The Australian Medical Property Fund requires asset occupancy rates of more than 90 per cent and for a significant portion of tenants to be on leases with more than five years to run.
Its real estate division has acquired the Miami Day Hospital and Medical Centre (pictured, top) on Queensland’s Gold Coast as the fund’s first asset.
In Hillcrest Parade, the 2172 square metre complex, which was only recently developed, includes four operating theatres.
Mr Gray said medical themed property is an emerging real estate sub-class “starting to achieve recognition for its defensive characteristics and ability to perform when other asset classes did not”.
He said this was because demand for healthcare is based on need and was non-discretionary and non-cyclical.
“On top of this, Australians were spending more money than ever on preventative healthcare and the proportion of Australians over 60 requiring acute and long-term healthcare was growing”.
As the associated cost continues to rise, Mr Gray said, “governments are moving towards alternative methods to fund healthcare, including a higher reliance on private sector reliance. This will continue to underpin demand for medical space as the sector diversifies away from traditional public hospitals to private day hospitals and medical centres”.
RAM’s other property interests include, in New South Wales, the Broadway Plaza near the Punchbowl train station, 17 kilometres west of the Sydney CBD, Ballina Central, Tanilba Bay Shopping Centre, Rutherford Shopping Centre and Gunnedah Shopping Centre.
In Queensland it holds, amongst other assets, Keppel Bay Plaza, Springfield Fair (pictured above, left), and in Brisbane, the Yeronga Village and Night Owl Centre.
It also has an interest, in some cases as a joint venture partner or a mortgagee, in hotels, in Melbourne, and in Thailand’s Phuket, Pattaya and Bangkok.
