Australian Unity’s Healthcare Property Trust (HPT) has reached $1 billion in funds under management, making it the largest healthcare property fund in Australia.
The fund was launched in 1999 to capitalise on growing demand for healthcare services, driven by Australia’s ageing population. It owns a portfolio of 37 health-care related properties across Australia including hospitals, medical clinics, day surgeries, consulting rooms and specialist centres such as radiology and pathology.
Chris Smith, head of healthcare property at Australian Unity Real Estate Investment, said that the fund’s long-term strategy to build and expand its existing assets to deliver health services demanded by Australia’s ageing population is a story that continues to resonate with investors.
“The fund has a very stable and supportive investor base who have benefited from strong returns over the past sixteen years.
“HPT has proven its ability to generate income in every market condition, over boom and bust cycles, including actively managing its exposure to interest rates when they were much higher.
“Recent valuations conducted in April and May 2016 of the Trust’s properties saw an uplift of close to $40 million, further evidence of the quality of the portfolio and the growing demand for healthcare infrastructure.
“Australian Unity has and continues to be an active long term investor in building and improving Australia’s social infrastructure.
“As the demand for healthcare services increases in line with Australia’s rapidly ageing population we have prioritised expanding, improving and upgrading the HPT’s existing hospitals and medical centres to meet this demand.
“HPT continues to work on a number of large-scale and long-term health infrastructure projects that provide mutually beneficial outcomes for patients, hospital operators and tenants, the wider community and investors.
“As Australia continues to grapple with social infrastructure challenges stemming from our ageing demographic and the rise in chronic disease HPT’s approach is to continue to help more and more Australians access healthcare services of the highest quality.
“For example, the HPT will conclude two major hospital projects in September this year.
“The first, a $50 million multi-phase project at Peninsula Private Hospital in Langwarrin, Victoria commenced in December 2014 and includes the construction of a new emergency department, 71 additional beds, a state of the art hybrid operating theatre and additional parking.
“The second major project is the $30 million development of Robina Private Hospital, in Robina, Queensland including the construction of 90 new hospital beds.”
Mr Smith said that the increasing cost of healthcare is one that future governments will find hard to fund.
“Outsourcing the provision of healthcare infrastructure and services to quality, trusted companies is the most obvious solution for governments.
“The private health sector now plays an increasingly important role in the provision of services relied on by millions of Australians that were traditionally provided by the public system. The private sector treats two in five of all patients in Australia, provides one out of every three beds, conducts two in three elective surgeries, and manages 45 percent of chemotherapy treatments, more than 70 per cent of eye surgeries and 47.5 percent of heart surgeries.
“This provides a clear future growth path for healthcare property as an asset class,” he said.
The wholesale version of the HPT has returned investors 11.04 per cent over the last ten years and its one year return to 31 May 2016 was 20.45 per cent. In April this year, the fund temporarily suspended applications given the increasingly strong demand from investors and will re-open the fund to new applications as it progresses its development program.
Mr Chris Smith – head of healthcare property
Direct line: 03 8682 4534
Mobile: 0418 379 763
Australian Unity Real Estate Investment (AUREI) is the property funds management business of Australian Unity Investments, part of the Australian Unity group, a national healthcare, financial services and retirement living organisation that has been operating for more than 170 years.
AIHW (Australian Institute of Health and Welfare) 2013. Australian Hospital Statistics 2011–12. Health services series 50. Cat. no. HSE 134. Canberra: AIHW. AIHW 2014. Australian Hospital Statistics 2012–13. Health services series. Cat. no. HSE 145. Canberra: AIHW.
Returns are as at 31 May 2016 for wholesale units in the Healthcare Property Trust, the inception date for the wholesale units is 28 February 2002. Returns are calculated after fees and expenses and assume the reinvestment of distributions. Past performance is not a reliable indicator of future performance. In deciding whether to acquire, hold or dispose of the product you should obtain a copy of the current product disclosure statement and consider whether the product is appropriate for you. A copy of the PDS is available at australianunityinvestments.com.au or by calling investor services on 13 29 39.