A joint venture fund between GIC and Toronto-listed NorthWest Healthcare Properties REIT is spending A$110 million ($71.58 million) to buy a private suburban hospital in Queensland, Australia from local healthcare provider Healthscope and expand the existing facility.
NorthWest Australia, a vehicle established by the Singapore sovereign wealth fund and the local arm of NorthWest in 2018, is taking over the 70-bed Peninsula Private Hospital in a suburb of Brisbane, Queensland through a sale-and-leaseback agreement with Healthscope.
The JV plans to nearly double the hospital’s capacity by developing a vacant 14,600 square metre (157,153 square foot) section of its site to house additional healthcare facilities which would be operational by the third quarter of 2024, according to a press release.
“In this area of Brisbane, there is strong demand for Peninsula Private’s existing services that exceeds the capacity of its current infrastructure, and we look forward to expanding the surgical and medical service offering to the local community of the Moreton Bay region through the development we will jointly undertake,” NorthWest executive director Richard Roos said in the statement on Monday.
A$6 Billion Fund
The GIC-backed fund acquired the acute surgical and rehabilitation hospital at 89 George Street, in Kippa-Ring, which currently has 70 existing beds, two theatres and a procedure room.
Construction is set to commence on expansion of the facility in the first quarter of next year and will include refurbishment of existing rooms as well as adding two new operating theatres and an additional procedure suite. A Northwest representative said the expansion plan will nearly double the existing healthcare facilities to support rising demand for orthopaedic, gastroenterology and ophthalmology services.
Located in the Redcliffe Peninsula, 27 kilometres (16.7 miles) northeast of the Brisbane central business district, Peninsula Private Hospital will continue to be operated by Healthscope alongside the 40 other private hospitals it runs across the country.
The acquisition adds to A$3.6 billion in investments by the A$6-billion wholesale fund since its inception four years ago.
The Singaporean investor and Canada’s NorthWest REIT set up the healthcare joint venture in 2018 with an initial A$2 billion of debt and equity funding to acquire and develop facilities across Australia. The fund size was increased to A$3.5 billion in May 2019.
To date, NorthWest has over A$6.7 billion in assets under management in Australia and New Zealand, and 11 development projects in the pipeline.
The partners still have A$2.3 billion of capital to deploy in acquisition and development opportunities across Australia after injecting additional funds to bring the vehicle’s total capitalisation to A$6 billion in March.
The Kippa-Ring deal follows a similar sale-and-leaseback transaction which the GIC-NorthWest JV completed with Healthscope in 2019, when the fund acquired a A$1.2 billion hospital portfolio from the Melbourne-based operator. That portfolio includes 11 facilities, with GIC holding around a 70 percent interest in the venture.
“Our expanded partnership with Healthscope will deliver enhanced healthcare services to Australians in need,” Roos said. “Long-term ownership and partnerships like this are at the core of NorthWest’s business model and we look forward to enhancing Peninsula Private jointly with Healthscope.”
The partners did not disclose the ownership details of their latest acquisition.
GIC in Australia
GIC, which ranked as the world’s most active state-owned sovereign wealth fund last year, is upping its exposure to the Aussie real estate market after making a series of office and industrial investments in 2022.
Last month, GIC bought a 50 percent stake in ASX-listed Charter Hall’s A$800 million project to redevelop an office tower at 555 Collins Street, Melbourne.
This came just a month after an ESR fund backed by the sovereign wealth fund spent A$106.5 million in August to pick up five income-producing industrial assets in Greater Melbourne.