Australian Unity Healthcare Property Trust secures three McKenzie Aged Care sites in opco/propco deal – $500M of sites under due diligence

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Australian Unity’s Healthcare Property Trust (AUHPT) has acquired three of McKenzie Aged Care Group’s aged care facilities in its second opco/propco deal for this financial year – and says it has another $500 million of deals that are in active due diligence, which will make the unlisted company a major player in the sector.

The deal for the aged care homes in Queensland comes after AUHPT paid $10.75 million in July to acquire Infinite Care’s approved 177-bed residential aged care facility in Knoxfield, 33km south-east of Melbourne’s CBD.

AUHPT’s portfolio of aged care beds in 10 homes stands at 1,358 and after the completion of Knoxfield, it will increase to 1,535.

“We are currently developing new facilities and in active due diligence on a number of other transactions, totalling circa. $500 million, and expect to make further announcements on these in the coming weeks,” said Chris Smith, General Manager – Healthcare Property, Australian Unity.

“Our immediate pipeline is worth $500 million, and we have a secondary pipeline of potential acquisitions and developments which, if they come to fruition, would be worth around $1 billion.”

Mr Smith said AUHPT was expected to grow to $4 billion in the next couple of years due to increased interest from institutional investors in the sector.

AUHPT paid $93.65 million (excluding acquisition costs) to McKenzie Aged Care Group for three aged care homes:

  • the 133-bed Capella Bay in Capalaba, approximately 22km southeast of Brisbane’s CBD;
  • the 122-bed Seabrook in Deception Bay, 40km north of Brisbane’s CBD, and
  • the 149-bed The Terraces (pictured), a three-storey home in Varsity in the Gold Coast.

The properties have been leased back to McKenzie for a minimum term of 25 years, with the option for the Group to extend the leases by two additional 10-year periods.

“The addition of three established, well-located and securely leased aged care facilities enhance tenant and income diversification and increase the Fund’s weighted average lease expiry from 15.7 to 16.1 years, based on the 25-year lease terms for the portfolio acquisition,” said Mr Smith.

Mark Pratt, Executive General Manager – Property, Australian Unity, said the nation’s healthcare property sector offers strong investment potential into the future, adding that healthcare real estate remained an attractive asset class for investors.

“As the consolidation of the aged care industry unfolds, Australian Unity will continue to invest in and develop properties that deliver long-term investor returns whilst supporting older Australians in their later years,” he said.