BGH Capital, one of the largest private equity owners of healthcare operations in Australia, has listed its East Melbourne day hospital for sale with vacant possession.

The property, located at 23 Clarendon Street, is being marketed by CBRE’s Australian Healthcare & Social Infrastructure team of Mark Granter, Sandro Peluso, Marcello Caspani-Muto and Kai Wang.

Formerly operated by Virtus, the property has long been the home of the East Melbourne Specialist Day Hospital offering IVF, Gynaecology and Dentistry services. The accredited class 9A hospital underwent a major refurbishment this year before BGH and Virtus committed to a relocation to streamline operations.

Positioned in the heart of the East Melbourne / Collingwood healthcare precinct, the property has a building area of 1,549sqm and land area of just over 1,000sqm. It features a 13-bed day hospital on the ground floor, office and consulting space on the upper floors with 21 car spaces and storage in the basement.

Mr Granter noted, “There is a good level of tenant interest and healthcare demand within the East Melbourne and Collingwood healthcare precinct, and this is not just limited to large scale healthcare providers. There are also a number of boutique doctor-led syndicates who would see a building like this as attainable and attractive for their long-term operations. This is one of Melbourne’s premier healthcare precincts.”

The day hospital is very close to the Epworth Hospital with the Epworth Freemasons Albert Street hospital, Eye and Ear Hospital, and St Vincents hospital also nearby.

Mr Peluso added, “Setting aside the value within the existing improvements and land-rich nature of the asset, we expect healthcare led demand to drive interest during this process. While the location and price point are attainable for private doctor groups, we also expect several institutional partners to leverage their existing relationships with these doctors and even consider JV arrangements to drive a higher yielding outcome, which has been critical over the past 24 months.

“Very few larger scale buyers in this market are settling for passing acquisitions, no matter how appealing the price point, as the returns cannot be justified to their capital. A doctor-led partnership would likely overcome this.”

The property is being sold via Expressions of Interest closing in mid to late February 2025.

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