International property company Grosvenor Group’s Indirect Investment team has partnered with Australia’s Heathley Asset Management Limited (Heathley) to invest in high quality strategic health care property.
The joint venture’s initial investments are the Mater Women’s and Children’s' Hospital, Townsville, and the Westside Private Hospital, Brisbane. Its strategy is to acquire well-leased and strategically located private medical properties in Australia. The combined value of the seed assets is A$94m.
This is the first time that Grosvenor’s Indirect Investment team has invested in the health care sector and demonstrates the team’s continued commitment to diversify the Group’s property portfolio by sector, country, investment type and management team.
Andy Yates, Investment Director, Indirect Investment, Grosvenor Group said:
“We believe that the health care property sector has strong long-term fundamentals, and offers significant opportunity to deliver stable returns that are less correlated with other core property sectors. We will look to grow our presence in the sector and are actively seeking further opportunities in health care property globally.
“Grosvenor’s Indirect Investment team strategy is to back specialist third-party managers with a demonstrable track record of generating value. Heathley’s experience and expertise in Australian health care property will provide opportunities to realise similar high quality investments in this specialist sector. We look forward to working closely with Andrew and the team to expand the portfolio”.
Andrew Hemming, Managing Director, Heathley Asset Management Limited, said:
“We believe the healthcare property sector has the potential to grow 20-fold from $5billion of securitised medical property. With our growing pipeline, we are delighted to be partnering with Grosvenor, a quality investment group with a proven track record in focussed, sophisticated and well researched investment themes which have delivered strong results over the long term.
“At Heathley we take the time to understand the supply chain of healthcare, build enduring relationships, structure the deals effectively, ensure all stakeholders benefit and quality care is delivered sustainably. This is what distinguishes us from others and delivers the returns to investors over the long term.”
“For investors, the healthcare sector offers a defensive strategy underpinned by the constant (less cyclical) demand for healthcare, longer tenant tenures, high occupancy and lower turnover. This is illustrated via low correlation coefficients when compared to Australian equities (0.1) or Australian commercial property (0.3). We are focused on healthcare property which, we believe over time, will match the growth in non-discretionary demand for healthcare around the country.”
Mater Women’s and Children’s Hospital, Townsville offers a stable, long-term cash flow underpinned by a 13 year lease to Mater Health Services North Queensland. Other high quality tenants include the associated Icon Cancer Care and Queensland X-Ray, demonstrating the growing trend for major healthcare service providers to co-locate with strong hospital operators.
Westside Private Hospital is a newly developed mixed use medical facility in Taringa, Brisbane, which includes a day hospital, oncology, medical consulting suites, retail outlets, a childcare centre and 63 bed medi-hotel. Major tenants include Montserrat Day Hospitals, Queensland X-Ray and UniLodge.
Grosvenor has been active in Australia for 50 years. The Indirect Investment team currently has one active investment with Propertylink, which holds four office assets in North Ryde, Sydney. The team has also realised two investments with Propertylink, delivering 27% IRR and 30% IRR respectively, and are actively looking at new joint venture opportunities.
For more information contact:
D +44 (0)20 3805 4816 / M +44 (0)74 7135 0848
Grosvenor Group Communications Director
T +44 (0) 20 7312 6435 / M +44 (0) 7736 383 262
Notes to Editors
About Grosvenor Group:
Grosvenor Group is one of the world’s largest privately-owned property companies. We develop, manage and invest in property in more than 60 cities around the world.
Through the activities of Grosvenor Britain & Ireland, Grosvenor Americas, Grosvenor Asia Pacific and Grosvenor Europe we diversify the Group’s property portfolio by geography, sector, activity, currency and management teams.
Our Indirect Investment business further diversifies the Group’s property interests beyond the expertise and strategies of our four regional Operating Companies. It invests Grosvenor’s capital in Africa, Australia, Europe and North and South America.
Grosvenor Group’s purpose is to deliver lasting commercial and social benefit. To live up to this ambition, for over 10 years we have adopted an approach we call 'Living cities' which aims to guide and inspire our property activities.
Achieving strong commercial returns enables our activities to be enduring. Applying our expertise with a far-sighted perspective to improve properties and places provides a positive impact on communities, neighbourhoods and cities.
About Heathley Asset Management Limited
Heathley is a market leading Australian healthcare real estate fund manager with over 40 years’ experience managing money for wealthy individuals, families and institutions.
Heathley continues to leverage its depth of knowledge, relationships and skill set in the property and healthcare sector to drive attractive, consistent and reliable income and capital growth for its investors.