MaxCap and April Group have acquired RPAH’s medical facility in Sydney.
Commercial real estate fund managers April Group and MaxCap have teamed up to acquire the RPAH Medical Centre in the inner-Sydney suburb of Newtown for $117m.
They bought the property at 100 Carillon Avenue, Newtown, from Australian Unity and will capitalise on its position next to the Royal Prince Alfred Hospital and the University of Sydney. The location puts the fully leased purpose-built medical facility at the heart of one of Australia’s major healthcare and research precincts.
The 7231sq m facility, with 214 car spaces, traded on an initial passing yield equivalent to 6.75 per cent. A targeted capital expenditure program is planned to upgrade the building into a modern medical facility.
The sale of the RPAH Medical Centre was brokered by Simon Quinn, Thomas Thorsen, Kate Low and James Barber of JLL and Adrian Bokolis of Savills.
The centre was once destined to be sold to the Elanor Investors Group for its health real estate fund but that deal did not go ahead.
The RPAH Medical Centre in Sydney.
MaxCap is better known for it debt activities but has a large property book. Head of equity investment Simon Hulett said the partnership brought together two companies with a proven track record for investing in high-quality social infrastructure and healthcare assets. “Opportunities like this are scarce – a fully leased asset of this calibre will deliver immediate yield to investors, with further upside through clear strategic execution,” he said.
The investment move is underpinned by strong long-term macro drivers, including Australia’s ageing population, population growth and rising healthcare expenditure, which is driving demand for modern care and outpatient facilities.
April Group founder and director David Briscoe said the asset was highly attractive to the manager and its investors due to its history of full occupancy, chronic under-supply, and established ecosystem of leading medical professionals. “There is already a waitlist of medical tenants seeking to secure space within the building,” he said.
Commercial property giants are buying into sectors that cater for Australia’s ageing population.
“The resilient and broad tenant profile of the asset enables us with the opportunity to enhance the identity of the building and offer elevated service levels that better suit this critical health precinct through a period of transformational change.”
The RPAH precinct has $2bn of investment under way, including the redevelopment of RPAH, the Sydney Biomedical Accelerator and The Healthcare and Life Sciences Hub. JLL’s Mr Quinn said the landmark transaction showed the robust fundamentals underpinning Australia’s healthcare property sector and validated the sustained appetite for premium healthcare assets.