ASX-listed Healthscope has sold the recently closed Cotham Private Hospital, in Melbourne’s blue-ribbon suburb of Kew – a property which hit the market in September month carrying price expectations of about $15 million.
Investors were also targeted as part of the campaign, as were owner-occupiers – the four-storey hospital, with a capacity for 60-beds, only closed in June. It is configured with 31 car parks, four operating theatres and numerous consulting suites.
Eight parties – a mix of residential developers, medical users and aged care accommodation providers – contested for the property following an expressions of interest campaign managed by CBRE’s Sandro Peluso, Julian White, Josh Twelftree and Jimmy Tat. Dan Magree of Magree Property Advisory was Healthscope’s transaction manager.
“We are excited about the opportunity to develop a boutique residential project for owner-occupiers in this premium location,” Hamton executive chairman Paul Hameister said.
“We are looking forward to adding value to the local area with our considered and very high-quality approach to development”.
Hamton has developed medium density apartment complexes, particularly in Melbourne’s bayside suburbs. It has also built high-density projects in the inner-city, with an end value of up to $2 billion.
An Abbotsford project worth $420 million picked up two UDIA awards in 2016: the National Award for Excellence in the High-Density Housing, and the President’s Award for the best project across all nine categories.
Hamton is currently redeveloping part of the Moonee Valley Racing Club site in a joint venture with Hostplus and the Moonee Valley Racing Club.
The sale of 209 Cotham Road, about eight kilometres east of the CBD, was a clear sign of market confidence from multiple buyer segments particularly given that the site was sold with vacant possession, Mr White said.
“While this can typically be a challenge when securing funding from the major banks, the deal highlights that experienced and long-term developers have identified that now is a great time to buy”.
Mr Peluso added “the interest in healthcare real estate has increased markedly over the past three years, with government support and demographic trends boding well for the asset class”.
“With 22% of Australia’s population forecast to be over the age of 65 by 2056, investors are demonstrating a clear interest in these offerings. Given the limited supply of hospital investments made available to the market, the Cotham site presented a significant opportunity for larger medical groups”.
The Kew deal comes four months after Healthscope sold a Parkdale hospital to local developer Steller for around $11 million.
In September we reported that an investor paid $16 million for a 5297 square metre block at 46-48 Wills Street Kew. This block is now expected to be subdivided into seven or eight large blocks, and make way for freestanding homes.
A year ago, Malaysia-financed developer Beulah International paid more than $11 million for a 2000 sqm block at 367 Cotham Road, Kew. Dwellings within a medium density apartment project mooted for this site are currently being marketed for sale.