Australian Unity Real Estate Investment (AUREI) has acquired a property in Townsville, Queensland, for its flagship fund, the Healthcare Property Trust, for $5.5 million.
The property, located at 136 Wills Street Townsville, is an office building that AUREI is proposing to convert into a 60 bed mental health hospital. The conversion would be undertaken in conjunction with Healthe Care Australia, which is intending to then lease the property for 22.5 years. The development of the brownfields site is expected to cost $7.5 million.
Mr Chris Smith, head of healthcare and retirement property funds at AUREI, said that Healthe Care approached AUREI to partner with it in developing the site.
"Healthe Care identified the site as a suitable location and building for conversion to a mental health hospital, a facility that it had been looking to establish in the area for some time.
"We have had a long relationship with Healthe Care over the years. It is a tenant in a number of our properties in the Trust, and it is a very experienced provider of mental health care. Healthe Care’s expertise in this area provided us with the confidence to partner with them on this project.
"The process of obtaining the appropriate permits from the local authorities to convert the site is well underway. We have already spoken with local authorities about our plans and they are generally supportive of our intentions," Mr Smith said.
He added that AUREI had experience in successfully developing healthcare sites in brownfield locations in the past, or partnering with others to do so.
"We have developed The Valley Private Hospital in Mulgrave and Brunswick Private Hospital in Victoria which have enhanced the medical care and support available to the local communities, and are good examples of successful AUREI developments that were the result of partnership arrangements.
"In addition we are currently in the planning phase for brownfield works at Brisbane Waters Private Hospital on the Central Coast of New South Wales which is expected to commence in 2015.
"We are continuing to look for assets to add to the Trust, and this acquisition will fit well with the existing portfolio.
"The Trust has significant capacity thanks to very strong inflows in the last 18 months – over the last financial year, inflows reached $140 million – and investor interest in this kind of social infrastructure investment remains very high," Mr Smith said.
Further information: Mr Chris Smith Head of healthcare and retirement property funds Direct line: 03 8682 4534 Mobile: 0418 379 763 Email: email@example.com