Epping Private Hospital Changes Hands for $80m

A private hospital and medical centre in Melbourne has sold in what’s been lauded as the largest single healthcare real estate transaction of the year.

The Epping Private Hospital and Medical Centre at 230 Cooper Street, Epping, sold for about $80 million. 

The sale of the modern, long WALE healthcare asset was completed by Knight Frank’s Sam Biggins and Trent Preece after an on-market expressions-of-interest campaign launched in May. 

The property was sold by a syndicate managed by Northwest Healthcare Properties. The divestment was prompted by “an estate management matter for one of the syndicate investors”, Knight Frank said.  

The property was sold to KM Property Funds, a Melbourne-based property fund manager forming part of the KordaMentha group.

 “The sale represents Australia’s largest single healthcare real estate transaction year to date,” a Knight Frank spokesperson said.

The property is 18km north of the CBD within Melbourne’s rapidly growing Northern Growth Corridor that includes some of Melbourne’s fastest-growing suburbs.

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

The building is fully leased with a 8.7-year WALE as at December 1, 2023.

Epping Private Hospital and Medical Centre caters to surgical and medical specialties and is anchored by a 24-bed, four-theatre hospital and day surgery that is occupied by Northern Health, who now take up 49 per cent of the building.

Other major tenants and health faculties include Genesis (oncology), I-Med (radiology), Melbourne Pathology, and Family Doctors (general practice) and a number of specialist and consulting suites.  

▲ The medical asset in the Northern Growth Corridor is fully let.

Biggins said there had been significant interest in the asset from recognised healthcare investors plus a number of groups seeking their first exposure to Australian healthcare real estate.

“The 100 per cent let, 8.7-year WALE, inflation-linked income and defensive fundamentals of the asset proved attractive to investors,” he said.

“The population of Melbourne’s Northern Growth Corridor is forecast to increase by 65 per cent by 2041, placing significant strain on existing medical facilities.”

Preece said that increasingly, institutional and private capital were reallocating from traditional asset classes into alternatives such as healthcare and living sectors. 

“Our experience with Epping Private Hospital and Medical Centre is testament to this, with several new-entrant Australian healthcare buyers competing with known healthcare investors for the opportunity,” he said.

“We expect the flow of capital into Australian healthcare real estate to grow as investors continue to increase allocations to alternate asset classes.”