- Heathley Direct Medical Fund No.2 pays $18,083,720 representing a 6.25% yield for a 1,607 sqm Medical Centre anchored by Qld X Ray (part of ASX listed Sonic Healthcare) and Terry White Chemmart Pharmacy Group
- Property sold fully leased with 7 year WALE and net annual income of $1,130,327
- Queensland investment volumes are at $2.8 billion for first half of 2017 - up 33% over the previous period
- Cushman & Wakefield research shows Coorparoo as a top 10 location for mixed use development
- Expression of Interest national campaign generated over 60 inquiries – driven by high net worth individuals and a mix of publically listed and private funds
Brisbane, July 14 2017: Cushman & Wakefield has today announced the $18.084 million sale of a Medical Centre situated at Coorparoo, some 4 kms south east of the Brisbane CBD. The sale was completed following significant interest from high net worth investors and publically listed and private funds seeking exposure to quality assets underpinned by long term leases and strong tenant covenants within the key medical and allied health care sector.
The expression of interest national campaign was conducted by Cushman & Wakefield’s Managing Director Queensland, Glen Wright, and National Director, Michael Collins. The property, located at 332-342 Old Cleveland Road in Coorparoo comprises a 2,496 sqm land holding with a net lettable area of 1,607 sqm. The Coorparoo Health Centre is adjacent to the several substantial development projects in the area, including the $125 million soon to be completed Coorparoo Square development. Coorparoo is undergoing a major rejuvenation and repositioning having always been a favoured inner city suburb of Brisbane.
The property was sold fully leased with a Weighted Average Lease Expiry (WALE) of 7 years and net income of approximately $1.130 million per annum. Tenants include Sonic Healthcare subsidiary, QLD X-Ray, Terry White Chemmart Pharmacy, Primary Healthcare’s QML, and doctor’s surgery, Coorparoo Clinic. The site has been a pharmacy location for 60 years whilst the Doctor’s surgery has been there some 35 years.
Coorparoo was ranked in the top 10 locations in Brisbane for mixed-use development in Cushman & Wakefield’s recent Retail Outlook Report, due largely to its proximity to the CBD, population growth and transport access. This was also underpinned by increasing higher density development with construction activity steadily increasing.
Commenting on the sale, Michael Collins, said: “The significant levels of interest from high net worth individuals and the listed funds is reflective of the asset’s strong leasing covenants and longer term rental growth prospects coupled with the security provided by medical and allied health care tenants.
“With investment activity remaining strong coupled with decreasing stock levels, investors are starting to see value in high quality assets in highly sought after locations such as Coorparoo, particularly with exposure to the health care sector which is growing rapidly given our ageing population. This factor accompanied with the strong development activity in the area demonstrates the strength of the current market.”
“This is another example of strong investor demand.” Glen Wright Managing Director said. Glen Wright went on to say that “There appears to be some Investors in the market talking about the rising cost of capital coupled with Bank’s lowering their loan to valuation ratios. Therefore the window for Vendors to secure these record low yields may be closing. This means that the time is right to sell now in the back half of 2017”
“National investment volumes remain buoyant, but Queensland continues to experience particularly high levels of investment activity in 2017. This has prompted Investors to seek exposure to higher quality assets, with a long dated WALE and strong leasing covenants, The Coorparoo Health Centre fits squarely with this criteria,” Mr Collins said.
According to the latest Cushman & Wakefield research, Queensland investment volumes in the last current quarter have continued at levels that saw Queensland top the state and territory rankings for investment volumes in the first quarter. The $2.8 billion invested in the first half is up 33% compared to the first half of 2016, with unlisted funds remaining the most active purchasers, in a continuing trend over the last 12 to 18 months.
Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. The firm’s 43,000 employees in more than 60 countries help investors optimise the value of their real estate by combining global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project & development services, tenant representation, and valuation & advisory. To learn more, visit cushmanwakefield.com.au or follow @CushWakeAust on Twitter.