The Australian Unity Healthcare Property Trust (HPT) has acquired the Brisbane Waters Private Hospital on the New South Wales Central Coast for $16.175 million. The property is forecast to deliver a yield of 9.27 percent in its first year with the potential to add additional value through brownfield development, says Chris Smith, Australian Unity’s head of healthcare and retirement property funds.
HPT is an unlisted property trust that invests in healthcare-related property assets with a primary focus on delivering regular income, plus the opportunity for long-term capital growth.
The property purchase will be funded by capacity within the debt facility of HPT, which currently has a gearing level of 21 percent, and the property will have an initial 22.5 year lease term to Healthe Care.
The property at 21 Vidler Avenue, Woy Woy, is a two-level, 78-bed general hospital complex. It was originally constructed in 1978 and comprises a number of ancillary buildings and site improvements. HPT will refurbish and extend the hospital during the early years of ownership.
“The purchase of this property is another quality addition to HPT’s diverse property portfolio, and increases its allocation to New South Wales property to 37 percent,” Mr Smith says.
“Woy Woy is located at the southern end of NSW’s Central Coast region, 80 kilometres north of Sydney’s CBD, and is a popular retirement destination with a growing population.
“The Woy Woy area, including Ettalong, Umina, Ocean Beach and Koolewong, is also an important part of the Sydney commuter belt, with rail journey times of just over an hour to reach Sydney’s CBD and easy access via the F3 Motorway from Sydney to Newcastle.
“HPT will continue to look to invest in quality healthcare property that meets its stated aims of providing income and capital growth.
“The HPT now has significant capacity to acquire property that meets its strict acquisition criteria and is seeking opportunities to acquire new assets as well as looking at further developing existing assets within the trust. Both the pace and frequency of these developments have picked up substantially over the past few years, and we expect more expansions in the future will play an increasingly important role in the delivery of community healthcare services,” Mr Smith says.
In line with its active management strategy the Australian Unity Real Estate Investment team has recently re-financed HPT’s debt facility in two tranches, the longest of which expires in 2019. This has resulted in the cost of debt decreasing by 70 basis points and subject to HPT’s total level of gearing the reduction is expected to be accretive to the earnings and distribution yield of HPT.
Over the past 15 years HPT has grown to become one of the largest and highest-rated unlisted property funds in Australia. Today, it has a diversified tenant base and holds a quality direct portfolio of 25 healthcare properties across Australia, valued at over $550 million (as at 30 June 2014).
The Healthcare Property Trust – Wholesale Units returned 9.03 percent over one year, 7.71 percent per year over three years, 6.29 percent per year over five years and 11.36 percent per year since its inception on 16 May 2000*.
HPT was named the winner of the 2013 Australian Property Institute NSW Excellence in Property Awards in the Property Trust Industry category, and the Australian Unity Real Estate Investment team was named the Professional Planner / Zenith Investment Partners Direct Property Fund Manager of the Year for 2013.
Australian Unity Investments is the funds management arm of Australian Unity, a national healthcare, financial services and retirement living organisation that has been operating for more than 170 years.
* As at 30 June 2014. Past performance is not a reliable indicator of future performance.
For more information contact:
Chris Smith – Phone: 03 8682 4534
22 July 2014