Estia Health’s buying streak continues in Melbourne
- Strategic purchase: Estia buys approved Melbourne aged care site
- Expansion continues: Acquisition follows nine aged care purchases since acquired
- Shovel-ready appeal: Approved development sites are scarce
- Growth pipeline: Estia now has over 100 homes
Australia’s second-largest aged care operator has notched up its 10th home acquisition in the two months since its proposed sale was announced.
Estia Health has purchased a 5,047 sqm site at 110 Albion Road, Box Hill, 14km east of the Melbourne CBD, for $9.5 million from Not For Profit provider VMCH in an off-market transaction.
The site has a Planning Permit, issued in 2022, to build a three-storey, 100-bed aged care facility.
The acquisition marks the latest in a purchasing spree by Estia that has continued since the operator was sold by Bain to equity investors StonePeak and Exight in May for a reported $2.5 billion.
In June, Estia acquired three homes in Melbourne’s outer suburbs from Victorian family-owned operator Norsan followed by six homes from Not For Profit AnglicareSA in July.
Estia now has over 100 aged care homes and almost 10,000 beds.
Govt grants
Estia Health received a $5 million Government grant under the Aged Care Capital Assistance Program earlier this month to expand its Salisbury home in Adelaide.
The grant marks the first time that one of Australia’s five largest aged care operators have attracted funding under the Government-funded grant program. Recent rounds of ACCAP funding have prioritised shovel-ready projects.
Off-market sale
The Box Hill site was initially marketed for residential development, but a confidential campaign secured Estia as the buyer.
“Sites like this, that are ready to go [with approved plans for residential aged care], are scarce and really sought after,” CBRE Australian Healthcare and Social Infrastructure Director Marcello Caspani-Muto told The Weekly SOURCE.
Marcello said aged care operators have been turning their minds to development in the last 12 months amid the serious shortage of beds. The number of people in Australia aged 85 and over is forecast to more than double by within 25 years.
Box Hill has had little aged care development in more than a decade, so the planned facility is expected to attract strong demand.
Approved beds in undersupplied market
The deal is symptomatic of a broader trend across the aged care sector, Marcello added.
“Approved beds in undersupplied metropolitan catchments are becoming harder to find every year,” he said.
“Operators are increasingly willing to transact off-market and move quickly for assets that have had substantial planning works complete, allowing the quickest possible speed to market. Once they identify a site that ticks the box we can work through financial modelling together.”
The sale shows that strong demand among aged care operators continues for approved, value add or shovel-ready opportunities.
