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Australian Unity’s Healthcare Property Trust acquires three QLD aged care properties with 25-year leaseback

18 Nov 2021

Australian Unity’s Healthcare Property Trust (AUHPT) has settled a transaction with McKenzie Aged Care Group acquiring three Queensland aged care properties for $93.65 million (excluding acquisition costs). The properties have been leased back to McKenzie Aged Care Group for a minimum term of 25-years.

The purchase is in line with AUHPT’s commitment to invest in high quality, income-producing assets that expand and improve healthcare and social infrastructure in Australia’s key growth corridors.

The three properties include Capella Bay, a contemporary 133-resident facility located in Capalaba, approximately 22km south-east of the Brisbane CBD. The second property, Seabrook, provides accommodation for 122 residents and is in the established suburb of Deception Bay, 40km north of the Brisbane CBD. The third facility is The Terraces, a modern three-storey 149-resident facility in the Gold Coast suburb of Varsity Lakes.

The 25-year lease agreements also include the option for McKenzie Aged Care Group to extend the leases by two additional 10-year periods.

Chris Smith, General Manager - Healthcare Property, Australian Unity, said the quality of the assets and the secure, long-term lease arrangements provide AUHPT investors a compelling, income-producing opportunity in an increasingly competitive market.

“The addition of three established, well-located and securely leased aged care facilities enhance tenant and income diversification and increase the Fund’s weighted average lease expiry from 15.7 to 16.1 years, based on the 25 year lease terms for the portfolio acquisition.”

“These acquisitions augment AUHPT’s aged care portfolio and follow our recent land purchase ahead of the $54 million development of an aged care facility in Knoxfield in Melbourne’s eastern suburbs to commence in 2022.”

“2021 has been another successful year for investors in the Healthcare Property Trust and we continue to make long term investments in Australia’s critical healthcare and social infrastructure without paying too much for hotly contested assets in an exuberant market.”

“We are currently developing new facilities and in active due diligence on a number of other transactions, totaling circa. $500 million, and expect to make further announcements on these in the coming weeks.”

Mark Pratt, Executive General Manager – Property, Australian Unity, said Australia’s healthcare property sector offers strong investment potential into the future, adding that healthcare real estate remained an attractive asset class for investors.

“Demand for superior, well-run aged care, healthcare and medical infrastructure will only increase as our population ages,” Mr Pratt said.

“As the consolidation of the aged care industry unfolds, Australian Unity will continue to invest in and develop properties that deliver long-term investor returns whilst supporting older Australians in their later years.”

The Healthcare Property Trust continues to deliver on its objective to provide investors consistent and sustainable income returns, together with long-term capital growth. For the 12 months to 30 September 2021, the Fund returned 36.50%, its three-year return was 17.90% pa and over five years it returned 16.43% pa.1 In October 2021, Australian Unity’s Healthcare Property Trust was named Lonsec’s Property and Infrastructure Fund of the Year.

1 As at 30 September 2021. Based on Australian Unity Healthcare Property Trust Wholesale Units, returns are calculated after fees and expenses and assume the reinvestment of distributions. Past performance is not a reliable indicator of future performance.

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