Australian Unity’s Healthcare Property Trust (HPT) has announced the acquisition of Western Hospital in Henley Beach, South Australia, for $22.5 million, with a further $5.9 million to be invested on expansion works.
The hospital facility, which includes a GP clinic, is located within eight kilometres of Adelaide’s central business district with minimal in-market direct competition, strong demographics and opportunities for futher expansion and development.
Australian Unity’s Head of Healthcare Property, Chris Smith said the $1.52 billion fund’s acquisition will support the goals of the hospital’s tenants.
“The vendor, also the operator of Western Hospital, wanted an experienced and trusted asset manager they could work in partnership with to deliver improved performance and facilitate the hospital’s expansion over the longer term”, Mr Smith said.
The $5.9 million of planned capital works will include an additional operating theatre, air conditioning and building services upgrades and other associated works. The HPT currently has a pipeline of over $500 million of greenfield and brownfield projects underway.
Mr Smith said that the HPT is well positioned to invest in assets with a long-term view and has a demonstrated record of completing significant developments and expansions staged over decades in line with its tenants requirements.
“We’re an active property manager with a long-term approach and a mutual structure that allows us to focus on investing in assets to improve healthcare services in the communities they operate.
“We continue to be approached with opportunities like the one at Western Hospital from market participants seeking a stable, Australian- based, capital partner that understands healthcare property and can take a long-term view. For those organisations, while pricing is an important consideration, the longer term performance and certainty of the capital partner is the higher priority.
The HPT has been active in South Australia in the past 12 months. In December 2017, the HPT divested Adelaide’s Wakefield Private Hospital, having acquired it in 1999 when the Trust was formed. It sold for $50 million, in excess of its then book value of approximately $40 million. Last month, the Trust put the Calvary Rehabilitation Hospital in Walkerville on the market, a property that was also acquired in 1999.
Western Hospital is the HPT’s ninth acquisition this calendar year, and its second in South Australia following the purchase of One Care Medical Centre in Pennington for $8 million in May.
In August this year an independent revaluation of 14 properties in the HPT’s portfolio resulted in a net increase of $14.01 million to the properties’ book value prior to valuation.
With 53 assets under management, the HPT’s one-year total return was 10.63 per cent, its three-year total return 14.39 per cent per annum and its five-year total return was 12.94 per cent per annum as at 30 September 2018.1
Jessica Hales, Six O’Clock Advisory
Mobile: 0433 021 181
About the Healthcare Property Trust
HPT commenced almost 20 years ago. It has more than 12,000 investors and owns 53 healthcare assets across Australia’s eastern seaboard. It has delivered investors steady, consistent income distributions since its inception and in recent years has also provided capital growth.
In 2017, Australian Unity’s Herston Quarter Redevelopment was formally recognised in the inaugural public private partnership awards for ‘Best Social Infrastructure Project’ and ‘Best Financial Structure.’ In May this year, Australian Unity’s HPT was named ‘Direct Property Fund of the year’ in Money Management’s fund manager of the year awards 2018.
Units in the Australian Unity Healthcare Property Trust ARSN 092 755 318 are issued by Australian Unity Funds Management Limited ABN 60 071 497 115, AFS Licence No 234454. Information provided here is general information only and current at the time of publication and does not take into account the objectives, financial situation or needs of any particular investor. In deciding whether to acquire, hold or dispose of the product you should obtain a copy of the Product Disclosure Statement and seek professional financial and taxation advice. The Trust is currently closed to new investments.
1Returns are calculated after fees and expenses and assume the reinvestment of distributions. Past performance is not a reliable indicator of future performance.