Australian Unity has delivered its first building as part of Brisbane’s Herston Quarter precinct,which will be home to the new Surgical, Treatment and Rehabilitation Service (STARS) which has officially achieved commercial acceptance. The milestone confirms the on-time delivery of the project, some three years and six months since works began.
Located two kilometres north of the Brisbane CBD, STARS will provide medium to long-stay rehabilitation services, short-stay elective surgery (such as endoscopy), and specialist outpatient care. It includes 182 beds, seven operating theatres, three endoscopy suites, and specialist consulting rooms.
Making up 25 per cent of the land area of Herston Quarter, STARS will be home to some of Australia’s leading health and medical research and innovation. Herston Quatrer is located within the Herston Health Precinct which includes Royal Brisbane and Women’s Hospital, The University of Queensland, Queensland University of Technology, and QIMR Bergohfer Medical Research Institute.
Mark Pratt, Executive General Manager Real Estate Investment at Australian Unity said commercial acceptance for STARS is a significant achievement and a critical step for Herston Quarter and the broader Herston Health Precinct’s progress.
“It’s rewarding to realise the vision of a facility that was conceived many years ago”, he said.
“As the first public hospital in Australia to be funded by investors in a real estate investment trust, STARS is an example of how capital and real estate partnerships can support the infrastructure and services that serve our communities”, he said.
“The public system is Australia’s largest provider of health services, and partnerships like this support the government to deliver healthcare services in a capital-light manner”, he said.
Typically, public hospitals are delivered in a public-private partnership (PPP) and done as a build-own-operate-transfer arrangement. “By contrast, STARS is a PPP framework, but it’s a build-to-own on a long-term lease with Metro North Hospital and Health Service taking a 20-year lease, with two 10-year options, as the operating service.
“Ripe for the times, STARS is an innovative hybrid of traditional infrastructure and real estate funding solutions that delivers positive outcomes for all stakeholders, he said.
Mr Pratt said STARS demonstrates Australian Unity’s ability to partner with both public and private operators to deliver critical and integrated social infrastructure while providing investors with access to long-WALE assets, which bode well for valuations over the medium to long-term.
“Assets like STARS offer a level of comfort to investors because of the relative predictability of consistent income from long-term tenant relationships”, he said.
Chris Smith, General Manager - Healthcare Property, Australian Unity, said STARS was a unique and important asset in Australian Unity’s $2.32 billion Healthcare Property Trust, which owns 60 properties across Australia, including 19 in QLD.
“We know Brisbane’s population aged 60-69 years increased some 111% between 2011-20181. Investing in services that address these needs is critical for the community and will deliver long-term income for investors”, he said.
In the last 12 months, the Healthcare Property Trust has acquired six aged care properties, as well as key sites across Queensland, NSW, and Victoria for hospital developments in healthcare precincts, and over the next three years, it will invest ~$460m in construction activity.
Mr Smith said HPT recently extended its debt facility by an additional $150m to replenish the Trust’s balance sheet.
“STARS is only possible because HPT’s long-standing investors had faith in Australian Unity to deliver this landmark project”, he said.
“Ensuring we continue to deliver consistent income for investors from assets that deliver vital community services remains our key focus,” Mr Smith said.