Hong Kong buyer dips into healthcare sector with $5 million Wantirna deal

14 November 2020

A Melbourne medical precinct has changed hands for $5 million – the latest in a spate of transactions in the strengthening healthcare sector.

The healthcare precinct, situated at 169-171 Stud Road in Wantirna, was purchased by a Hong Kong-based investor via an Expressions of Interest campaign managed by CBRE.

The 1,630sqm property, which has an Urban Growth Zoning, comprises two multi-level buildings occupied by five healthcare tenants, including physiotherapist, dentist, rehabilitation clinic, lymphoedema clinic and specialist medical group. It provides a passing income of $220,000 per annum.

CBRE’s Australian Healthcare and Social Infrastructure team – Jimmy Tat, Sandro Peluso, Marcello Caspani-Muto and Josh Twelftree – negotiated the sale on behalf of the private owners.

Mr Tat said the sale highlighted the strength of the healthcare investment sector in a challenging financial environment.

“We are seeing more investors gravitate towards healthcare as an asset class due to its relative security given our ageing population and the increasing demand for medical service nationally. Evidencing this, there was significantly interest in this Stud Road medical precinct, with nine competitive bidders – six of which were local and the other three Asia-based,” Mr Tat said.

“The reopening of the Victorian economy, coupled with the general stabilising of the wider Australian economy, is helping to reignite confidence in commercial real estate, with many investors looking for premium location assets and strong lease covenants.”

The transaction represents the second recent healthcare transaction in Wantirna, with a centre at 230 Mountain Highway changing hands for more than $4 million in August – translating to a yield of 4.6%.

Mr Peluso said healthcare was emerging as the prized sector of commercial property.

“Even in the middle of a pandemic it is proving to be a stable income-producing asset class. Healthcare property investors are less likely to feel the pressure of rental relief or long-term vacancies than traditional asset classes, which is a priority consideration for many investors,” Mr Peluso explained.

“A lot of investors are pulling money out of super and establishing SMSFs to invest in commercial property, providing a greater and more reliable return than those funds that are exposed heavily to equity markets.”