Dexus and its wholesale health fund have inked the largest deal yet to boost its exposure to the sector with the acquisition of the Australian Bragg Centre in Adelaide from Commercial & General for $446 million.
The centre, known as SAHMRI 2, is a state-of-the-art clinical and research facility within Adelaide’s $3.6 billion BioMed City precinct and will increase the group’s healthcare exposure to over $1 billion and grow the unlisted fund’s portfolio to $900 million.
The ASX-listed Dexus has identified healthcare as a growth engine in its diversified business model and created the fund to invest in large-scale medical facilities, including the North Shore Health Hub and the Adelaide Calvary Hospital.
Dexus chief executive Darren Steinberg said the deal will accelerate the growth of the group’s funds-management platform and increases portfolio diversification, “providing exposure to a sector with strong tailwinds”.
Dexus is also focused on boosting its funds under management business, which provides lucrative management fees and that has seen it suggested as an interested party in the AMP Capital platform. The group is also undertaking asset sales.
The Adelaide building, which is currently under development, is 77 per cent pre-leased to customers either backed or supported by the South Australian government, with a weighted average lease expiry of 21.9 years from completion in August 2023.
The acquisition terms include a two-year rental guarantee provided by Commercial & General over the remaining space to be leased.
Dexus executive general manager, funds management, Deborah Coakley called the purchase a milestone for the health fund, that “secures a landmark, large-scale healthcare asset, diversifying the fund’s portfolio of high-quality healthcare properties”.