NSW medical centre marks the first healthcare transaction of 2024

Australian Unity, a mutual company delivering health, wealth and care services has sold Corrimal Medical Centre in New South Wales for $20 million.

Located at 46-50 Underwood Street, Corrimal, the 1,496sqm centre is fully leased to and occupied by Healius Limited for a 15-year term.

The centre was purpose-built in January 2017 and provides services including General Practice, Radiology, Pathology, Dental and Physiotherapy.

CBRE’s Australian Healthcare and Social Infrastructure team of Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto brokered the deal on behalf of Australian Unity.

“While several high-quality healthcare assets were marketed throughout 2023 in Australia, as of January 2024 less than 35% have transacted with many citing increased costs of capital for institutional purchasers as the root cause. However, the successful transaction of the Corrimal Medical Centre bucked the trend and aligns with the trust’s book valuation,” Mr Caspani-Muto said.

Australian Unity’s General Manager of Healthcare Property, Chris Smith said,” The sale reflects a passing yield of sub 6% and is a solid result for the Trust in the current climate. Our continued focus is on optimising our portfolio construction, including strategically recycling capital from the sale of shorter WALE assets into longer-term stable income streams for our investors.”

Mr Peluso added, “We expect a broader increase in healthcare clearance rates in 2024 in line with broader positive market sentiment. Many institutional and private investor groups are taking a long-term view on both interest rates and commercial property more broadly.”

“There is a substantial volume of private capital in the market who can compete at price points beyond $50,000,000 and we still see these purchasers as the key drivers of successful outcome until the interest rate environment stabilises.”