Fund manager Barwon adds Phillip Island medical centre to portfolio
Barwon Investment Partners has lifted the value of its healthcare property fund to almost $185 million after buying the Cowes Medical Centre on Phillip Island for $8.8 million.
The single-level 1381-square-metre medical centre at 164 Thompson Avenue is fully-leased and includes a general practice, pharmacy, dental, pathology and radiology services as well as parking for 47 cars. The vendor was Cowes-based Path Enterprises Pty Ltd.
“The Cowes Medical Centre is a welcome addition to the fund. It provides critical medical services to the Phillip Island community and we look forward to working with the doctors and specialists to provide services to the local community,” Barwon founder Rob Morrison told The Australian Financial Review.
As of June 30, the Barwon Healthcare Property fund comprised a national portfolio of 19 fully leased assets (including Cowes) valued at $184.7 million with a weighted average lease expiry of 6.6 years. The fund delivered a total return of 8.5 per cent for the 12 months to June to wholesale investors.
The off-market sale of the Cowes Medical Centre was negotiated by Marc Leiba and Jonathan Rosenthal of Leiba Commercial in conjunction with Peter Daris of CPN Commercial Group.
“Despite banks having to tighten up their lending as a result of the extended low interest rate environment, there is still a large appetite for quality properties such as this one that can be purchased and sold off market by both buyers and sellers,” Mr Leiba said.
Investors have been pouring money into the securely-leased healthcare sector with yields falling from an average of 7.75 per cent two to three years ago to below 5 per cent now, according to a CBRE report.
However, the sector is facing some headwinds.including recently introduced new rules that cap how much rent medical centre operators can charge pathology providers they sublease space to.
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