HMC Capital, through its affiliate HealthCo Healthcare & Wellness REIT, will buy a portfolio of 11 private hospitals in Australia, including four mental health hospitals and seven acute care hospitals managed by Healthscope
Australian asset manager HMC Capital has signed an agreement with US-based healthcare investor Medical Properties Trust to acquire certain private hospitals in Australia for a total of A$1.20bn ($802m).
Under the terms of the agreement, HMC Capital, through its affiliate HealthCo Healthcare & Wellness REIT, will buy a portfolio of 11 private hospitals in Australia.
The portfolio includes four mental health hospitals and seven acute care hospitals, which are currently being managed by Australia-based private hospital operator Healthscope.
In addition to the acquisition, the Australian asset manager has launched a new Healthcare and Life Sciences Unlisted Fund, worth more than $2bn.
HMC intends to divide the hospitals between its HealthCo Healthcare and Wellness REIT, and the newly created Life Sciences Unlisted Fund.
The company plans to fund the transaction through a $320m underwritten capital raising, through $123m commitments in the entitlement offer.
Its funding commitments are supported by more than $350m fully underwritten institutional placement and indicative commitments to increase debt facilities, said HMC.
The transaction is expected to complete in the second half of 2023, subject to certain regulatory approvals.
HMC Capital managing director and CEO David Di Pilla said “HMC Capital is pleased to announce another major transaction for the group which delivers on our strategy to deploy capital into high-quality alternative assets with significant pricing power and development upside on behalf of our capital partners.
“Our partnership with Healthscope on this transaction enabled HMC Capital to shape a compelling transaction with a significantly improved tenant covenant and rental growth upside via CPI-linked indexation and higher development returns.”
In 2019, Medical Properties acquired the 11 Australian hospitals for $859m and leased them back to Healthscope to manage daily operations.
It is the world’s second-largest non-governmental owner of hospitals, with properties across the US, the UK, Switzerland, Germany, and Australia, reported Reuters.
Medical Properties chairman, president and chief executive officer Edward K Aldag said Jr. said: “The sale of this portfolio by means of a competitive process, in the midst of an extraordinary disruption to global capital markets, demonstrates the breadth and resilience of demand for hospital infrastructure assets.”