Barwon fund bulks up with medical multibuy

December 3, 2020 / Healthcare Property

Barwon Investment Partners added an eight-asset swag of medical properties around the country to one of its funds in a series of deals worth a combined $60.6 million.

Three of the assets have settled, and five will settle or become unconditional before the end of 2020, taking the Barwon Healthcare Property Fund’s assets past $300 million. It is one of two such funds run by the platform, alongside the larger $750 million Institutional Healthcare Property Fund it established three years ago.

The fund has returned 11.84 per cent over the 12 months to the end of September, a rate which confirms the resilience of healthcare real estate during market turbulence, according to Barwon’s head of healthcare property, Tom Patrick.

“These acquisitions, along with the diversity of quality tenants in these properties, will help equip the fund to continue to deliver robust returns even through challenging market conditions,” he said.

The fund held its own during the pandemic disruption, accruing around 97 per cent of its expected income from March through to September. Valuations remained stable, a favourable result, Mr Patrick noted, compared with the harder-hit traditional commercial property sectors such as shopping malls.

“The COVID pandemic has truly tested our investment thesis that healthcare property provides investors with stable, income-based returns through all market cycles whilst also exposing investors to potential benefits from the large thematic growth tailwinds of the broader health economy.”

The fund’s latest acquisitions include the Eye Hospital at Launceston in Tasmania. The facility sits in the city’s medical precinct and is fully leased to the Cura Day Hospital Group.

Barwon went west for two more purchases, taking control of the Bunbury Medical Centre and the Usher Medical Centre in Western Australia. Both properties are leased to IPN Medical Group, one of the country’s largest operators of medical centres. Three medical centres in Queensland and one in Victoria add to the tally.

The final purchase will help diversify the fund’s portfolio, with a fund-through deal for a specialist disability housing facility at Salisbury in South Australia.

The Barwon-run fund has bought the land and will provide monthly construction payments to the developer at an agreed interest rate. The development is a two-storey apartment facility comprising 15 two-bedroom units.

It is the fund’s first foray into specialist disability accommodation, an emerging asset class forecast to swell to a $5 billion investment category, housing about 28,000 people backed by National Disability Insurance Scheme payments worth an annual $700 million.

Read the full story here

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