Centuria Healthcare has been on a buying spree, acquiring seven assets for a total of $167 million total for Centuria Healthcare Property Fund (CHPF), almost doubling its value to $342 million.
Managing director Andrew Hemming said four of the buys were mental health facilities – the first foray Centuria Health has made into the sector.
The acquisitions include Perth’s largest mental health hospital, the Perth Clinic, which it bought for $50.1 million on a sharp passing yield of 4.05 per cent. The property is 100 per cent leased and has a weighted average lease expiry of 11.6 years.
“Mental health hospitals, for both inpatients and outpatients, are a major growth area within the healthcare sector,” Mr Hemming said.
“Equally, dementia care operators that provide personalised, non-institutionalised homes are growing in demand.”
CHPF also bought a mental health outpatient centre at Frankston on the eastern edge of Melbourne for $12 million, leased to a Victorian government agency, and two dementia care residences in Castle Hill, Sydney.
They cost $3.7 million each and are fund-through projects that will accommodate up to 10 residents apiece when they are completed by the end of 2022.
The largest purchase was $60.5 million for the fund-through development of Weststate Private Hospital in Townsville, a project that amalgamates six lots into a single 8000sq m mixed-use site.
Development approval is in place for a five-storey hospital with four operating theatres, one procedure room, 19 day beds and 22 overnight beds. It is pre-leased to Weststate, a newly established operator.
In the inner-west Sydney suburb of Petersham, CHPF bought MetroRehab Hospital, a short-stay facility with 37 beds that cost $8.45 million on a 13.2-year WALE.
“These hospitals align with CHPF’s investment strategy to acquire healthcare properties that utilise effective models of care within markets with strong demand,” Mr Hemming said.
“Westgate in particular concentrates on best practice care that also lowers of out-of-pocket expenses.
“This will be a game-changer for the North Queensland private healthcare market.”
The final asset is the $28.6 million Sunbury Medical Centre, 40 kilometres north-west of Melbourne.
CHPF recently raised $62.4 million in equity to help fund the acquisitions, which were bought on a weighted average passing yield of 5 per cent and lengthens its WALE from 7.4 years to 11.4 years.
Another $11.7 million asset bought by the fund is due to settle in October.