Entry level investment in Melbourne’s alternative sector

29 March 2023

JLL Melbourne has been appointed to sell a modern suburban medical centre at 433–435 Police Road, Mulgrave – a perfect low-cost entry point into the popular “alternative investment” sector.

Medical centres are being targeted by investors due to their solid income streams that are far less affected by external economic factors than other traditional property asset classes.

McKinley Medical Centre comprises a single-level facility totalling 466sqm with a modern and bright fit-out on a large 2159sqm site with 32 on-site car parks.

The centre comprises a large modern reception and waiting room, 10 consulting rooms, a spacious theatre, treatment room, staff amenities and offices, and a small pathology suite.

JLL’s Mark Stafford, Simon Quinn and MingXuan Li are marketing the McKinley Centre as an opportunity to secure a modern essential service asset at an affordable price point.

JLL Melbourne Senior Executive (Healthcare & Life Sciences) Mark Stafford said the Police Road property represented a well-established centre leased to the long-standing tenant Healin Pty Ltd on a 5 + 5-year lease until 2032.

A recent JLL Research paper “Alternative Investment Outlook 2023” said: “Healthcare has arguably become one of Australia’s most sought-after real estate sectors over the past few years.

“The largely non-discretionary nature of healthcare spending, typically longer lease terms compared to core sectors and both indirect and direct government support towards healthcare expenditure have been key motivators for investors seeking exposure to Australian healthcare real estate,” the report said.

“The investment qualities are underpinned by the lease to an established and experienced operator, who has operated in the Mulgrave area since 1978, making it an ideal opportunity for many investment portfolios,” he said.

McKinley Medical provides a full range of services with a team of 9 doctors that have been at the centre for between 16 and 29 years.

Mr Stafford said the healthcare industry was a popular alternative investment as it offers a stable investment class that is resilient and recession proof, as it provides an essential community service.

“With life expectancy continuing to rise and an ageing population, healthcare expenditure is becoming increasingly important, with it now accounting for 9.3% of the national GDP, which is equivalent to an annual spend of $6,661 per person,” he said.

The centre’s position close to Mulgrave Private Hospital and the Monash National Employment and Innovation Cluster provides for future growth in the local precinct.

“This property has enormous potential to capitalise on the growth occurring in this precinct, with a strong underlying landholding and the importance that key healthcare assets play in the local community, McKinley Medical Centre provides an opportunity that ticks a number of key investment criteria” Mr Stafford said.

McKinley Medical Centre at 433 – 435 Police Road, Mulgrave is For Sale by Expressions of Interest closing Thursday 4 May 2023 at 2pm (AEST)