Major Wollongong Asset in Tightly Held Healthcare Market Sells for $12.55 Million | JLL

5 June 2025
Property at 21-23 Denison Street, Wollongong

Sonic HealthPlus Wollongong Sold to The City of Newcastle by JLL Alternatives, Capital Markets

A modern, fully-leased medical facility located in Wollongong’s healthcare precinct has sold and settled for $12.55 million. The purchaser, The City of Newcastle, successfully acquired the asset following a competitive on-market Expressions of Interest process that saw the JLL Alternatives, Capital Markets team generate significant interest with over 140 registered parties.

The transaction was negotiated by JLL’s Simon Quinn, Thomas Thorsen, and Mark Stafford, achieving a 5.93 per cent passing yield.

Senior Director, Head of Alternatives, Capital Markets – Australia, Simon Quinn said the transaction exemplified the continued demand for high-quality, essential-service healthcare assets.

“Fully leased to one of the most trusted names in global healthcare and ideally located within a concentrated medical hub, this asset delivers long-term income security and investment resilience,” he said.

“Opportunities to secure assets of this calibre, particularly in NSW, remain rare — especially when underpinned by ASX-listed tenants like this.”

Located at 21-23 Denison Street, the property is fully leased to subsidiaries of ASX-listed Sonic Healthcare (ASX: SHL), Illawarra Radiology Group and Sonic HealthPlus, delivering essential radiology and occupational health services.

Situated within 1km of four major healthcare institutions — Wollongong Hospital, Wollongong Private Hospital, Victoria Street Private Hospital, and South Coast Private Hospital — the property sits in one of NSW’s most tightly held medical precincts.

Senior Executive Mark Stafford noted “healthcare assets offering this combination of strategic co-location with other medical providers and long-term leases to blue-chip operators continue to be highly sought after and tightly held.”

“Over the past 18 months have seen private investor interest in assets of this nature surging, with these capital ready groups able to act swiftly to secure assets” he added.

The medical facility with a net lettable area of roughly 1184sqm and 36 on-site car parks generates a passing net income of $743,800 with a weighted average lease expiry (WALE) of 6.1. Reconstructed in 2017, the building boasts high-quality fit-outs and substantial equipment investment by the tenants.

Zoned MU1 Mixed Use, the site holds a 1.5:1 floor space ratio and 60-metre height limit, offering potential for vertical expansion or future mixed-use redevelopment, subject to council approval.

Mr Thorsen said the asset’s proximity to Wollongong Train Station and Wollongong Central Shopping Centre further strengthened its connectivity and appeal.

“Healthcare assets in locations such as this, that offer close proximity to key healthcare infrastructure and lifestyle amenity are thriving, as utilisation rates across the country continue to increase,” he said.

The deal reinforces the growing demand for healthcare real estate, driven by Australia’s ageing population, long lease profiles, and the essential nature of medical services.

City of Newcastle was advised by Matt Kearney, National Director of Capital Markets for Commercial Collective.

Having secured Bunnings Taree and Sonic HealthPlus Wollongong, Mr Kearney noted that “these acquisitions are strongly aligned with the goals of the Newcastle Council Future Fund — to preserve and grow the City’s reserves through carefully selected, income-producing assets.”