Listed office REIT Dexus is making a significant push into healthcare property, picking up the Australian Bragg Centre for $446.2 million.
The buy is one of the largest single-asset private healthcare acquisitions to date, and pushes Dexus’ exposure to healthcare over the $1 billion mark.
Dexus head of healthcare partnerships George Websdale, who is speaking at The Urban Developer’s upcoming Healthcare Property vSummit, said the group is positioning itself as a key institutional partner in Australian healthcare property.
“This acquisition is a great example where private capital and specialised real estate expertise can unlock complex health investments,” Websdale said.
Websdale will round out a panel with Centuria Healthcare’s managing director Andrew Hemming and Barwon head of healthcare property Tom Patrick.
The Bragg Centre, developed by Adelaide firm Commercial & General, is Australia’s first and only proton therapy cancer treatment facility. It is expected to treat its first patients 18 months from its August 2023 completion date.
The building sits within Adelaide’s $3.6 billion BioMed City precinct, and is 77 per cent pre-leased with an average weighted average lease expiry of 21.9 years from completion.
Commercial & General chief executive Trevor Cooke said the acquisition marks a vote of confidence by the institutional market in the sector and the South Australian economy.
Dexus acquired the Bragg Centre in a 50:50 venture with its unlisted Healthcare Wholesale Property Fund.
Dexus’ unlisted healthcare fund was initially seeded in 2017 by $370 million in assets including the Calvary Adelaide Hospital—also developed by Commercial & General—and the GP Plus Healthcare Centre in Elizabeth, north of Adelaide.
Buoyed by $70 million of institutional investment it attracted earlier this year, the fund picked up the College Junction building in Brisbane’s Clayfield for $36.5 million.
Dexus boss Darren Steinberg said the buy increases the group’s exposure to a sector with strong tailwinds.
“This transaction accelerates the growth of our funds management platform and is a step towards our goal of being a partner of choice in Australian healthcare property.”
The transaction is due to settle 30 October 2020.