Centuria Healthcare Fund Adds $71.3m of Acquisitions

The Centuria Healthcare Property Fund has further expanded its fast-growing portfolio with a $51million In Vitro Diagnostic Manufacturing Laboratory at Mt Waverley VIC, $7.3million worth of dementia care residences in St Ives, Sydney, and a $13million medical centre development in West Lakes, SA.

The acquisitions further diversify the unlisted, open-ended healthcare real estate fund by location, tenant profile and property type, providing an 11.8-year Weighted Average Lease Expiry (WALE) and 99.1% occupancy. CHPF’s portfolio includes 18 assets worth $413.8million.

Andrew Hemming, Centuria Healthcare Managing Director, said, “We are pleased to announce further expansion of our rapidly growing healthcare fund and the introduction of a new healthcare asset class into our portfolio – life science laboratories.

“The development and manufacturing of in-vitro diagnostics will continue to experience tremendous growth, accelerated by the COVID-19 pandemic due to the volume of health screening required from nasal/saliva swabs to blood tests. With a focus on diagnostics, we believe this is an area that will continue to be in high demand, requiring state-of-the-art facilities.

“The pandemic has also shone a spotlight on Australia’s developing healthcare sector. We are partnering with the country’s leading operators to provide healthcare facilities that meet the requirements of the community today and in the future.”

PropertyStateValueYieldSize WALEOccupancy
77-97 Ricketts Road, Mt WaverleyVIC$51.0m4.80%8,048sqm14.893.5%
49 Benaroon Avenue, St IvesNSW$3.3m5.00%7 beds20.0100%
3 Garrick Road, St IvesNSW$4.0m5.00%10 beds20.0100%
WEST Medical HUB, Charles Street, West LakesSA$13.0m6.15%2,092sqm6.8100%
Total/ Weighted Average $71.3m5.07%13.995.4%

The $51million Mt Waverley acquisition is a repositioning of an existing facility to provide specialist laboratories and office accommodation. The property will be c.90% leased (by GLA) to ASX-listed Paragon Care Ltd for a 15-year term and c.3.7% leased to FIMMA, a private construction company, whose lease expires in April 2025. Refurbishment works begin in April 2022 and will include a specialised fit-out complemented by sustainable features such as solar panels. The asset is anticipated to settle in late December 2021.

CHPF continues to expand its dementia care residence portfolio, settling two fund-through developments in St Ives, Sydney. A single-storey house, at 3 Garrick Road, is providing accommodation for 10 dementia-afflicted residents and an onsite carer while 49 Benaroon Avenue is a two-level residence accommodating eight dementia patients and a carer.

Centuria Healthcare first announced the WEST Medical Hub in November 2020 as a turnkey call option with the $13million property due to settle in December 2021. It is positioned within Commercial & General’s masterplanned community, surrounded by 1,300 new residences and a new Uniting SA aged care facility.

Mr Hemming concluded, “Within the past 12 months CHPF has increased its portfolio by 198%, largely driven by investor appetite for modern, high-quality healthcare properties that provide favourable leasing covenants including long leases and blue-chip tenants.”

Since the beginning of FY22, CHPF has benefitted from a $6.2million valuation uplift. During this period, it also secured three significant leasing transactions including a 20-year lease to Nexus Hospitals across c.2,800sqm at Vermont South Medical Centre (Vermont South VIC), a 10-year lease to BGH Capital across 890sqm at Forrest Family Practice (South Bunbury WA), and two five-year lease extensions to I-MED Radiology and Sonic Healthcare across 700sqm at Coffs Medical Centre (Coffs Harbour NSW).

CHPF provides daily unit pricing, limited quarterly withdrawals[vi] and a liquidity event every five years. It has an annual target distribution rate of 5.50 cents per unit (CPU)[vii] in FY22 and has provided an 8.6% total return[viii] during the past 12 months.

The unlisted fund has recently opened to receive investment with a capital raise target of $34million. The fund will be open between 22 November 2021 and 10 December 2021. See our Review of the Fund here.

CBRE’s David Aiello and Sasan Misaghian acted for the vendors of 77-97 Ricketts Road, Mt Waverley, VIC.

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


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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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