A modern, long WALE healthcare investment in Melbourne’s rapidly growing Northern Growth Corridor has sold for circa $80 million.

The sale of Epping Private Hospital & Medical Centre at 230 Cooper Street in Epping, was completed by Knight Frank’s Sam Biggins and Trent Preece, following an on-market International Expressions of Interest campaign in May 2023.

The property was sold by a syndicate managed by Northwest Healthcare Properties, with the catalyst for the divestment being an estate management matter for one of the syndicate investors.

The sale represents Australia’s largest single healthcare real estate transaction year to date.

The property is situated in Epping, 18km north of the CBD within Melbourne’s rapidly growing Northern Growth Corridor featuring some of Melbourne’s fastest growing suburbs as land is made available to accommodate the growing population.

The property is strategically located opposite the Northern Hospital in Epping, one of Melbourne’s largest public hospitals and within an established major healthcare and medical research precinct.

The modern building is 100% leased with a long 8.7-year WALE as at 1 December 2023. The diverse tenant profile is underpinned by Northern Health, the operator of the Northern Hospital, who now occupy 49% of the building.

Epping Private Hospital & Medical Centre caters to a number of surgical and medical specialties and is anchored by a 24 bed, 4 theatre hospital and day surgery facility which is now occupied by Northern Health. The facility will provide much needed additional public theatre capacity in Melbourne’s fast- growing northern corridor and compliment the Northern Hospital opposite.

Additional major tenants and health faculties include Genesis (Oncology), I-Med (Radiology), Melbourne Pathology, and Family Doctors (General Practice) plus a number of specialist and consulting suites.

Significant interest was received from both domestic and offshore investors, including a number of new parties seeking to deploy capital into the Australian healthcare sector for the first time.

The property was sold to KM Property Funds (KMPF), a Melbourne based property fund manager forming part of the KordaMentha group. The new KMPF Epping Healthcare Fund received strong support from investors.

Mr Biggins said we experienced significant interest in the offering from recognised healthcare investors plus a number of groups seeking to gain their first exposure to Australian healthcare real estate.

“The 100% let, 8.7-year WALE, inflation-linked income and defensive fundamentals of the asset, including 49% occupancy by a public-sector health tenant in Northern Health, proved attractive to investors. The population of Melbourne’s Northern Growth Corridor is forecast to increase by 65% by 2041, placing significant strain on existing medical facilities.”

Mr Preece said we are increasingly seeing institutional and private capital reallocate from traditional asset classes into alternatives such as healthcare and living sectors.

“‘Our experience with Epping Private Hospital & Medical Centre is testament to this, with a number of new entrant Australian healthcare buyers competing with known healthcare investors for the opportunity at close. We expect the flow of capital into Australian healthcare real estate to grow as investors continue to increase allocations to alternate asset classes.”

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