Healthcare assets take prime position

Northwest Healthcare Properties and Aurora Healthcare have completed the $21m expansion of Belmont Private Hospital in Brisbane.

Major players in the healthcare property are delivering strong performances in the face of the slower property market, with fresh developments signed off and new projects completed even as the pressure of higher interest rates ratchets up.

Canadian group Northwest Healthcare Properties Management has just completed its $21m extension of Queensland’s largest private hospital, Belmont Private Hospital, through its New Zealand-listed fund, Vital Healthcare Property Trust.

The project underpins the operation of mental health provider Aurora Healthcare Australia, with the new expansion in the southside suburb of Carina adding an 24-bed combined peri-natal and women’s unit, a 10-bed young adult and adolescent unit and broadening the operator’s offering.

Northwest executive director of development Chris Adams said despite the growing number of businesses operating in the property space since the start of the pandemic, there was still opportunity given the gaps in supply.

Others have also been active. The listed HealthCo Healthcare & Wellness REIT secured $177m of accretive health and life sciences property acquisitions over the first half of the financial year, announcing last week it had acquired a diversified life sciences property located in the Macquarie Park Innovation Precinct in Sydney for $80.75m and struck up a strategic partnership with Aegros.

The property was sold by the Australian Unity Office Fund at a 1 per cent premium to its June independent valuation. John McCann of Colliers brokered the sale.

HealthCo also completed The George paediatric hospital in the southwest Sydney suburb of Camden.

Ray White head of commercial research Vanessa Rader said the increasing population would help underpin the demand for healthcare services.

“With the population expected to continue to grow, our international immigration is starting to increase, there will be a continued need for these medical type uses across the board in all locations and across all those different categories of medical,” Ms Rader said.

“What we’re seeing more and more of is large institutional investors come into the market, particularly for large medical practices or the private hospital sector, and we expect that will continue just because there is this increased need for medical uses.”

Investment firm Centuria revealed at its half-year results last week it had increased its healthcare platform 3 per cent to $1.7bn.

The firm’s managing director of healthcare, Andrew Hemming, said the business had a strategy to focus on delivering private healthcare masterplans complementary to the public system.

He said a lack of supply and long-term leases of 10 to 20 years, which were generally linked to CPI increases, had helped to support the sector’s appeal, alongside long-term trends showing the population was ageing, with a greater number of ailments.