Westbridge sells Perth medical centre

The 1723 square metre Cottesloe building is fully let.

Westbridge Funds Management has sold the fully leased Cottesloe Medical Centre for $11.8 million – more than double what the syndicate that has held it paid in 2004.

The latest deal, to a local investor, reflects a 5.71 per cent yield.

The Stirling Highway asset has a 5.6 year Weighted Average Lease Expiry.
The Cottesloe Medical Centre (marked) is near the Napoleon Road retail strip.

It also prices the building area at $6849 per square metre.

“Throughout the course of holding this asset, we implemented a number of proactive improvements to drive the value growth, including rejuvenating the tenancy mix with new ground floor tenancies, improving fit-outs and resetting leases to offer an attractive Weighted Average Lease Expiry for future buyers,” Westbridge head of Commercial Funds, Alex Lambert, said.

“Combined with the overall growth of the medical centre, we felt the time was right to sell the asset and wind down this fund to capitalise on strong fundamentals for our investors,” he added.

“The sale marked a total return of 540pc to Westbridge investors (net of initial equity invested), equating to an average annual return on investment of 29pc,” according to the executive.

Tightly held sector in WA: agents

The two storey Cottesloe complex occupies a 2074 sqm site at 525 Stirling Highway, on the south east corner of Forrest Street, also adjacent to Bulla Lane and the Napoleon Street retail precinct.

IPN Medical Centres operates the Cottesloe Medical Centre within 67pc of it on a recently expired seven year lease.

Blended with the other occupiers, LK Lymphoedema Centre and DB Dental, the Weighted Average Lease Expiry is 5.6 years.

JLL’s Nigel Freshwater, who brokered the deal with Simon Quinn and LJ Hooker Commercial’s Brian Neo, said medical and allied health backed investments are tightly held in Western Australia (story continues below).

Opportunities for ones in exclusive suburbs like Cottesloe, is even rarer, he added.

“Hence the market response to Cottesloe Medical Centre was appropriately aggressive in terms of both engagement and pricing,” according to the executive.

Eight offers received

Cottesloe is about 11 kilometres south west of Perth’s CBD.

“The sale…is the first medical and allied health centre transaction in Western Australia this year and is a sign of Perth’s growing need for high calibre medical facilities,” Mr Freshwater said.

“The fund initially acquired the asset for $4.85m in September, 2004, as part of a single asset syndicate for their investors,” he added.

“The sales campaign attracted interest from a large number of buyers looking for a passive investment and seeking a diverse and secure income stream,” according to the executive.

“Eight formal offers were received”.

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Marc Pallisco

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