Centuria Secures $291m Aged Care Property Portfolio
- $291m aged care portfolio acquisition; 38 facilities across NZ; blue-chip operator Heritage Lifecare
- 30-year1 sale and leaseback transaction; triple-net leases; 100% occupancy2
- Acquired by two Centuria unlisted funds:
- Centuria New Zealand Healthcare Property Fund (NZ) – 25 assets
- Centuria Healthcare Property Fund (Australia) – 13 assets
Leading Australasian real estate funds manager, Centuria Capital Group (ASX: CNI or “Centuria”), has rounded off the 2021 calendar year with a portfolio acquisition of 38 aged care properties for $291 million, secured on a 30-year1 sale and leaseback, triple-net lease agreements providing 100% occupancy2.
The geographically dispersed assets will be operated by leading New Zealand provider, Heritage Lifecare.
Approximately 64% of the portfolio, including 25 assets, will be owned by a new unlisted Centuria New Zealand Healthcare Property Fund (CNZHPF). The fund is expected to launch in the New Year.
The remaining 36% of the portfolio, including 13 assets, will be owned by the existing Australian-based unlisted Centuria Healthcare Property Fund (CHPF), which adds to its existing portfolio of 18 assets worth c. $415 million3.
Jason Huljich, Centuria Group Joint CEO, said, “This acquisition provides a unique opportunity to secure high-quality aged care assets, further expanding Centuria’s healthcare platform across New Zealand. We believe demand for aged care real estate within New Zealand will continue to increase due to undersupply of existing and new facilities and an increasing ageing population.”
Mark Francis, CEO of Centuria New Zealand, added, “New Zealand benefits from high levels of aged care subsidies with a significant percentage of an individual’s care funded directly by the Government along with funding from their pension. The stability of this model, and the broader regulatory environment, provides reliable revenue streams for the fund.
“Additionally, the portfolio’s income is underpinned by 30-year triple net leases. The long-term leases provide a level of certainty for CNZHPF while the triple-net structure means limited expenditure and better value for investors. These metrics, coupled with annual CPI-linked rent reviews, provides a compelling investment opportunity.”
The acquisition adds to Centuria’s c.$100 million existing portfolio of New Zealand-owned healthcare related assets, including the Anglesea Medical Centre, located in Hamilton’s CBD, and a Nudgee Road, Brisbane (Australia) property.
1 Weighted Average Lease Expiry (WALE) as at December 2021
2 At settlement
3 AUM includes direct and indirect interest in Nexus Property Unit Trust, assets on an as if complete basis and exchanged acquisitions to be settled
Following on from successful capital raises within both the commercial and industrial property sectors totalling around $240 million last year, a new Centuria managed fund will be seeking $121 million from investors for the launch of a new healthcare property fund.