Real Asset Management is spending $100 million on three hospital investments for an essential services real estate trust mooted to float mid-next year.
The vendor was New Zealand listed Vital Healthcare Property Trust, managed by Canada’s Northwest Healthcare Properties.
The assets include in New South Wales, Dubbo Private, purpose built, with 54 beds, and trading for $18.65m.
Mayo Private, which can sleep 79, and sits on 8.2ha at 2 Potoroo Drive, Taree, has collected $44m.
At Cooee, just west of Burnie, in Tasmania, North West Private, the third clinic has 70 places.
The portfolio has a 15 year Weighted Average Lease Expiry.
Occupier Healthe Care – Australia’s third largest private hospital provider – is on agreements with fixed annual rent increases.
JLL’s Simon Quinn brokered the deal; the blended net yield is 5.65 per cent.
RAM floats float after pipping half a billion
Upon settlement of the Dubbo, Taree and Cooee properties, RAM will hold a c$500m portfolio with 13 essential services backed neighbourhood retail centres and six healthcare investments.
Four are hospitals.
Director and head of Real Estate, Will Gray, said private and day clinics of the quality it has just obtained are rare.
“Each…is strategically located in a major regional health hub supported by significant government investment,” the executive added (story continues below).
“We have been actively working on this transaction for almost 12 months and see it as highly attractive to our investors given the long term sustainable and resilient income yield on offer in a high growth real estate corridor.
“Australia is looking at long-term sectorial demand around the need for medical and healthcare service-based assets,” according to Mr Gray.
“The provision of private healthcare services, including the assets they occupy will only increase in demand as the public healthcare sector continues to be burdened by high patient demands and ageing assets,” he said.
“Accordingly, we are only now just starting to see the commencement of significant institutional demand to participate in the healthcare or medical property space”.
RAM managing director and chief executive, Scott Kelly, added the company has built its portfolio since 2015.
Nowadays according to the executive, “record low [interest] rates and essential services-backed tenure, amongst other factors, are supercharging investment demand for these type of assets”.
“We plan to provide for that with some exciting capital markets initiatives in mid-2021”, he said.
Earlier this month HomeCo’s newly listed Daily Needs Retail REIT spent $131m on six childcare centre investments.
It later confirmed the purchase of another, 138 Hoffmans Road, Essendon, for $8.6m.
Elanor Investors Group has been populating its nine month old Healthcare Real Estate Fund with several social infrastructure assets, worth nine figures, and spread nationally.
In November Primewest outlaid $17.5m on three babysitting facilities for a new income focused fund.