- BRW Lists
Published 16 September 2010 06:40, Updated 16 September 2010 07:02
A direct property fund that invests in the land and buildings of leading hospitals, medical centres and day surgeries.
Investors seeking a stable income, capital gain over at least five years and exposure to an industry expected to benefit from Australia’s ageing population.
The Healthcare Property Trust buys the land and buildings of hospitals, medical clinics, nursing homes, day surgeries, consulting rooms, rehabilitation units, radiology and pathology centres. It is managed by Australian Unity Investments, the funds management arm of mutually owned health insurer Australian Unity. The trust currently owns eight properties in NSW, seven in Victoria, two in Queensland and three in South Australia. It has achieved an average annual return of 11.53 per cent since it was launched in 1999.
An ageing population is raising demand for doctors, surgery and other healthcare services. As the public health system struggles to keep up, much of this demand is being met by the private providers who lease the properties owned by the trust. Independent researcher Zenith Investment Partners reckons the trust is a “highly recommended” means for investors to exploit these trends. “The trust is designed to provide investors access to long-term stable income streams backed by solid covenant tenants with quality healthcare assets, which have themselves to be resistant to wider economic downturns,” it says. “The key individuals and supporting staff possess significant experience in real estate investment and development with the backing of AUI’s significant funds management capabilities.”
While distributions from the trust are generally stable, reflecting the stability of lease payments by tenants, growth returns can be volatile, reflecting the volatility of commercial property prices. As a result, the trust reported a total loss of 0.41 per cent in the 12 months to June, with a negative growth return of 5.77 per cent cancelling out a distribution return of 5.36 per cent. Investors have an opportunity to sell units in the trust each quarter. However, because total redemptions are limited to 2.5 per cent of the value of units on issue, individual investors’ requests may be met on a “pro rata” basis only.
The minimum initial investment is $1000. The fund has an annual management fee of 1.35 per cent of assets. The contribution fee can be up to 4.10 per cent.