Australian Unity Investments (AUI) has refinanced its Healthcare Property Trust (HPT) borrowings with a $200 million loan at a lower interest rate, significantly boosting distribution returns for investors in the Trust.
The term of the new loan is three years and replaces an existing facility of the same amount in advance of the due date.
Ms Carolyn Ireland, AUI’s head of capital markets, said that refinancing ahead of time shows the quality of the Trust and its assets.
“There was a good level of competition by the banks to take part in this facility, showing that conditions have improved significantly for quality assets.
“As a result, we have been able to negotiate a very attractive package. On current levels, we estimate the investors in the Trust will enjoy an increase in their distribution return of more than one per cent, taking the annual distribution to close to eight per cent.
“The facility provides three year debt certainty which gives an additional level of comfort for new investors, especially those now cautiously returning to investment markets,” Ms Ireland said.
The new financing arrangements are provided by four top-tier banks, three of whom took part in the previous facility.
Mr Chris Smith, head of healthcare and retirement property funds for AUI, said that the outlook for the healthcare property market remains strong.
“Healthcare property has maintained its value very well and given investors excellent returns, despite the recent economic problems and softening property values in some sectors and locations.
“We believe that healthcare property should have a standout year and certainly the first half of 2011 has been very positive.
“The very strong interest from overseas investors in Australian healthcare property continues, creating additional competition for assets which is starting to be reflected in property values.
“In addition, the continuing need for medical and health-related services for an aging population means that healthcare property will see high long-term occupancy demand which will contribute to strong yields for investors,” Mr Smith said.
Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has $12.1 billion in funds under management (as at 31 May 2011). The property funds management business has over $1.4 billion in funds under management (as at 31 May 2011).
Australian Unity Investments’ unlisted property funds and syndicates own more than 60 properties in the healthcare, retail, industrial and office sectors, in Victoria, New South Wales, Queensland, ACT, Western Australia and South Australia.
The flagship fund, the Healthcare Property Trust, currently has over $420 million in funds under management and owns 20 healthcare properties in New South Wales, Victoria, Queensland and South Australia as well as three vacant parcels of land for future development. The wholesale Health Property Trust has returned 7.99% over 1 year, 5.15% over 3 years and 10.11% over five years (as at 31 May 2011).
For more information please contact:
Carolyn Ireland – 03 8682 4559 or Chris Smith – 03 8682 4534