Centuria Healthcare Commits to $115m of Acquisitions

Centuria Healthcare Property Fund (CHPF) has secured more than $115 million worth of healthcare real estate. Three assets are currently under construction and capitalise on bespoke, operator-led fit-outs, which attract strong tenant covenants and long lease terms. The fourth asset is an $11.3million medical centre with a recently executed five-year lease extension.

The geographically diversified portfolio acquisition of medical centres and mixed-use healthcare real estate provides a blended weighted average lease expiry (WALE) of 8.6-years and 100% occupancy.

Andrew Hemming Centuria Healthcare Managing Director, said, “In the past, healthcare operators have needed to adapt older properties to suit their practice’s needs, which has often led to functional inefficiencies. A good example of this are primary care and allied health providers occupying older residential buildings. The main drawcard for these properties was their location within key suburban settings.

“We are now seeing a change in operators opting for a premise that, within it, contains referral pathways for optimising their business, or are adjacent to or within a healthcare precinct. This new approach builds a strong ecosystem that’s a one-stop-shop for patients requiring referrals, specialist treatments and rehabilitation while enabling operators to create a fully tailored offering where rooms can be set-up for specific procedures, enabling a higher volume of patients to be seen.

“Centuria Healthcare is proud to work with high-calibre operators to provide real estate that meets their patients’ needs sustainably into the future. Equally, we are pleased to be working with reputable developers with a strong track record in the Australian healthcare real estate sector.”

The acquisitions expand the open-ended unlisted CHPF’s portfolio to 23 assets worth $627million, providing a 10.3- year WALE and 99% occupancy. CHPF is a pure-play healthcare real estate fund.

In late March 2022, CHPF completed its sixth fundraising round, exceeding its initial target of $37million with investment totalling $50million.

Acquisitions

PropertyStateValuePassing YieldNLA (sqm)WALE (yrs)OccupancyExpected Completion
The Bond, 8 Elizabeth MacArthur Drive, Bella VistaNSW$66.2m4.5%5,6597.9100%Q4 2022
Robina Medical Centre, 299 Scottsdale Drive, RobinaQLD$27.5m4.72%2,86810.8100%Q4 2022
Greenfields Medical Centre 50 Montsalvat Drive, GreenfieldsWA$10.3m5.15%1,4409.5100%Mid-2022
Tandara Medical Centre 168 Corfield Street, GosnellsWA$11.3m5.15%1,2966.7100%Completed
Total / Weighted Average $115.2m4.69%11,2638.6100% 

The Bond, Bella Vista

Located at 8 Elizabeth MacArthur Drive, the A-grade medical asset is adjacent to the Norwest Private Hospital and part of the growing healthcare precinct. CHPF has secured eight strata titles within the seven storey, c.10,775sqm4 building. This translates to 53% of the building’s total Net Lettable Area (NLA) providing c.5,700sqm.

Four pre-lease agreements have been secured across 60% of CHPF’s investment in The Bond, including: 1,060sqm across a two-level subterranean oncology bunker let to GenesisCare on a 10-year term; 760sqm let to IVF specialist Dr Antony Lighten on a 15-year term; 680sqm let to psychology allied healthcare provider, Talbots Centre on a seven-year term; and 920sqm let to childcare provider, Kinda-mindi on a 15-year term. The balance of the space is secured by a two-year rental guarantee.

The Bond is part of a larger master planned precinct being developed by the Mulpha Group. The Bond is being constructed by Buildcorp with completion expected in Q3 2022.

Robina Medical Centre

The 100% fund-through acquisition of Robina Medical Centre/Child Care Facility incorporates a two-storey building, which will provide a medical centre, radiology clinic, childcare facility and café. The property, located at 299 Scottsdale Drive, Robina, is 75% pre-leased5 with a 24-month rental guarantee over the remaining 25%.

Commitments include 1,183sqm pre-leased to the GP-led Medical on Robina on a 20-year term and 968sqm leased to Green Leaves Early Learning childcare facility on a 10-year term.

The medical centre is being developed by Newlink Property Group and built by the privately owned Queensland builder Platinum Projects (QLD) Pty Ltd. It is located within the Robina health precinct and neighbours the Robina (public) Hospital. The Robina CBD serves as the major hub of economic trade, retail and employment for the southern Gold Coast region supported by a strong residential catchment.

Greenfields Medical Centre

The Greenfields Medical Centre is located south of Perth in the coastal city of Mandurah WA, the state’s second-most populous city6. It will comprise a single-storey, 1,440sqm2 building complemented by a 50-car on-grade parking. The property is 100% pre-leased, anchored by St John WA7, on a 10-year term. St John WA will provide a full-service centre comprising a GP practice, dental, pathology, X-ray and procedure rooms. Additionally, c.140sqm is pre-leased to physiotherapy provider, Jarrad Lethbridge & Life Ready Health Group, on a five-year term.

Greenfields Medical Centre will be one of four St John WA Urgent Care centres, a programme backed by Federal Government funding. The property is developed by Auswide International and built by Vespoli Constructions.

Tandara Medical Centre

Built in the 2000s, the single-storey medical centre is fully leased to existing Centuria Healthcare tenant customer, Partnered Health Medical Centre. The General Practitioner practice subleases to allied health practitioners providing physiotherapy, pharmacy, pathology and radiology.

CHPF invests across a broad spectrum of healthcare real estate including short-stay and day private hospitals, medical centres, specialist centres, mental health and dementia care, medical diagnostics and aged care facilities.

Genera45’s Daniel Steffe acted for Centuria on the Greenfield, Bella Vista and Gosnells acquisitions. CBRE’s Michael Hedger represented the Robina Medical Centre’s vendor.

Premium Members can find all Centuria Capital Articles, trading Analysis, Annual Reports and Presentations here

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