The $1.8 billion Dexus Healthcare Property Fund (DHPF) has sealed its first transaction since a capital raising earlier this year with the acquisition of Southport Private Hospital on the Gold Coast for $51 million.
The 90-bed hospital operated by Ramsay Health Care (ASX: RHC) has been acquired from the New Zealand-based Vital Healthcare Property Trust with a 20-year lease remaining in place with Ramsay.
Vital, which has an extensive portfolio of medical and aged-care facilities across Australia, also owns the Palm Beach Currumbin Clinic on the Gold Coast and Belmont Private Hospital in Brisbane.
The deal for Southport Private Hospital adds to the Dexus fund’s most recent Queensland acquisition, the Spring Hill Medical and Herston Car Park in Brisbane, which was acquired for $130.7 million in 2021.
“We are pleased to extend our partnership with Ramsay Health Care, through the acquisition of this high-quality hospital, while supporting the delivery of essential health services to the Southport community,” says DHPF fund manager Jemma Maddick.
“This investment is in line with the fund’s strategy of securing core, CPI-linked, long WALE, high-quality healthcare assets leased to blue-chip operators in key areas with high demand for healthcare services. The 20- year lease provides income security, backed by Australia’s largest private hospital operator, Ramsay Health Care.”
DHPF is an open-ended unlisted property fund for wholesale clients and has delivered a five-year fund return of 13.6 per cent to 31 March 2023.
“DHPF continues to attract capital, enabling it to execute on strategic growth opportunities,” Maddick says.
“We are seeing an increasing number of quality investment opportunities presenting themselves and as a leader in the sector we are well capitalised and credentialed to continue to diversify the fund.”
In July, DHPF raised $220 million in a full subscribed issue with about 65 per cent of existing investors accounting for the new capital.
DHPF has raised $1.3 billion from 16 institutional investors since its inception in December 2017.
The fund’s portfolio includes Calvary Adelaide Hospital and Australian Bragg Centre in South Australia, North Shore Health Hub in NSW Sydney, and Bethesda Clinic in Western Australia.
“DHPF’s growth mandate leverages, and is fundamentally underpinned by, strong sector and demographic trends including an ageing and growing population,” says Deborah Coakley, the executive general manager of funds management at Dexus.
“Investors in our flagship healthcare fund benefit from high quality healthcare property benefiting from long-term demand for quality healthcare services, with Australia’s health spending projected to continue to grow as a percentage of GDP over the next 40 years.
“These trends and recent government modelling underscore the need for private capital to be invested to support our communities.”
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