Property group Grosvenor has entered the healthcare sector in Australia in a joint venture with Heathley Asset Management.
The partners will purchase their first two private hospitals in Queensland for AUD94m (€60m).
Grosvenor’s indirect investment team sees its investment in the healthcare sector as part of its sectoral and geographical diversification strategy. Australia is set to be a precursor to the group investing in healthcare in other regions of the world.
Andy Yates, Grosvenor Group’s investment director of indirect investments, said: “We will look to grow our presence in the sector globally.
Yates said the group is actively seeking further opportunities to invest in healthcare assets in other markets.
“We believe that the healthcare property sector has strong long-term fundamentals, and offers significant opportunity to deliver stable returns that are less correlated with other core property sectors.”
Andrew Hemming, managing director at Heathley Asset Management, told IPE Real Assets that he approached Grosvenor to co-invest with the firm as it gets involved with bigger national deals.
Australia’s Heathley is talking to other institutional investors, including Australian and offshore pension funds.
“It starts with Grosvenor with these two private hospitals in Townsville and Brisbane.”
Hemming said the UK investor will underwrite the whole deal and hold a 50% stake for long term.
“We will sell down the other 50% over a period of time to other investors.
“They want to do a number of other deals. We currently have a contracted pipeline of AUD350m and they will look to provide equity for some of those deals.”
Hemming said it is likely that Grosvenor will also look to attract some of its own wholesale investors onshore and offshore to the sector and to jointly invest with Heathley.
“We believe the healthcare property sector has the potential to grow 20-fold from $5bn of securitised medical property.“
Heathley currently owns 46 healthcare assets, valued at AUD630m, and on track to grow its asset under management to AUD1bn.
Hemming told IPE Real Assets: “We looked at healthcare business models before (investing in) the property.”
“We are focussed on cashflow. Our investors want income and we have to make sure that that income is reliable.”
Grosvenor is a long established investor in Australia. It is currently a partner with Propertylink in a fund that owns four office buildings in the northern Sydney suburb of North Ryde.
