Private Investors Snap up East Melbourne Day Hospital Asset

Investor demand remains high for quality healthcare assets

BGH Capital, one of the largest private equity owners of healthcare operations in Australia, has sold its East Melbourne day hospital to a private international investor group.

The sale of the property at 23 Clarendon Street, was managed by CBRE’s Australian Healthcare & Social Infrastructure team of Mark Granter, Sandro Peluso, Marcello Caspani-Muto and Kai Wang.

The asset was sold unconditionally to the Asian-based investor group.

Mr Peluso noted the sale of the 1,549sqm medical building featuring 13-bed day hospital was hotly contested. Nine bidders were vying for the asset, and eight unconditional offers were received in the first round, which he said was unprecedented for vacant real estate.

“High quality assets, when supported with a comprehensive marketing campaign, continue to attract significant volumes of interest in the Victorian market and we expect long-term growth in the healthcare sector to continue outweigh any short-term headwinds,” Mr Peluso added.

Mr Wang said the team was working with a number of investors seeking to acquire assets in the healthcare sector.

“With 28 inspections conducted over the course of this campaign, we are now working with over $80 million of unallocated capital looking for high quality healthcare assets in Victoria. Although the recent cash rate reduction was minor, we’ve already seen how it has re-invigorated buyer confidence in the market,” Mr Wang added.

Formerly operated by Virtus, the property has long been the home of the East Melbourne Specialist Day Hospital offering IVF, Gynecology and Dentistry services.

The accredited class 9A hospital underwent a major refurbishment this year before BGH and Virtus committed to a relocation to streamline operations.