A medical centre in Adelaide’s south has sold following a sales campaign that generated strong interest.
The property, the Marion Specialist Centre at 199 Sturt Road in Seacombe Gardens, consists of a 978sq m medical centre building on a 1,763sq m site.
It was purchased by an interstate private investor from Leyton Property for $7.75 million following an Expressions of Interest campaign run by Knight Frank agents Chet Al, Max Frohlich and Ryan Mills.
The two-level Marion Specialist Centre was originally constructed around 1980 but it underwent a comprehensive refurbishment in 2022, transforming it into a modern state-of-the-art healthcare facility.
The medical centre is fully leased to eight established medical and allied health tenants, including anchor tenant Radiology SA. It has a staggered lease expiry profile, with a long WALE of five years by income.
Mr Al said the sale campaign generated strong interest from investors, with underbidder support.
“Healthcare assets are increasingly sought after in the current market due to its defensive attributes including strong client demand, especially as our population ages, appealing lease terms and a favourable risk-adjusted return profile,” he said.
“This particular healthcare property attracted both local and interstate buyer interest due to its solid investment fundamentals, including its secure cashflow, staggered lease expiry profile, long WALE and location.
“The Marion Specialist Centre is strategically positioned across the road from Adelaide’s largest shopping centre, Westfield Marion, which also has a bus interchange, making it highly visible and easily accessible.”
The area surrounding the medical centre also has plenty of surrounding amenity and complementary allied health uses and government support services, including Flinders Medical Centre and Flinders University.
Mr Frohlich said the Marion Specialist Centre was last sold in 2021 for $4.35 million, in a deal also negotiated by Chet Al.
“At the time I was working at Leyton Property and was involved in the refurbishment project,” he said.
“At that time the property had a WALE of 2.1 years (by income), with lease extensions for five of the eight tenants being negotiated during the sale contract period.
“Knight Frank was the right agency to resell the asset and achieve the best outcome for the client as we had the best understanding of the property given our history with it.
“The purchase price for this sale was $3.4 million higher at $7.75 million, which reflects an initial yield of circa 5.75% and rate per square metre for the net lettable area of $5,879.
“Since the last sale the asset has undergone a comprehensive refurbishment, which included a contemporary façade upgrade, lift replacement and full refurbishment of the common bathrooms, as well as a range of other things including an upgrade of the car park to provide 34 parks.
“It now also has a longer WALE and staggered lease expiries, as well as strong prospects for tenant retention, being a high-quality healthcare facility with limited options for tenants in the surrounding area.”
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