Diversification by geography, tenants and sub-sectors

Oksana Patron

30 September 2022

A strong focus on diversification has seen the Australian Unity Health Property Trust win the 2022 Financial Newswire-SQM Research Fund Manager of the Year Direct Property award.

“The Trust’s diversification by geography, tenant and sub-sector makes the Trust’s portfolio unique. This doesn’t happen overnight and has been carefully constructed over the past 23 years,” Chris Smith, head of healthcare property at Australian Unity, said.

“Australian Unity has built the $3.3 billion Healthcare Property Trust portfolio through a combination of acquisition and brownfield and greenfield developments. Quite often we acquire an existing property with a view to redevelop or expand.

“By taking this approach we end up with purpose-built buildings and properties that are master planned with the long-term view in mind.  This also assists to increase the tax deferred component of investor’s income and contributes to Australia’s critical healthcare infrastructure.”

When asked about the fund’s differentiating factor, Smith said that “being a part of the Australian Unity certainly help” and the fact that all decisions are made by the fund onshore.

“The operation and management of the Trust brings together the Australian Unity Group’s understanding of the healthcare sector as well as the investment management expertise and experience of our property team. This combination means that we are uniquely qualified to identify, and to manage, healthcare property investments.”

The Australian Unity Healthcare Property Trust is a long-term owner of hospital assets (and other healthcare related assets) and has worked with hospital operators (and other key

stakeholders such as governments) to put in place multi-decade development plans, supported by long term and considered master planning, to invest in critical community infrastructure that serves the healthcare needs of Australians.

On key decisions being made onshore, Smith commented that thanks to that the fund had deep and broad knowledge of Australia’s healthcare property sector coupled with the experience of Australian Unity’s long standing businesses in private health insurance, and residential aged care for example.

“The HPT team are focused on the Australian market, this means the opportunity set for the Trust is clear and we know the market exceptionally well. On a more practical level, decision making is generally very quick, with all decisions being made locally, onshore, in Australia, we have found this resonates well with some property vendors and tenant partners.

“As a result of our focus and long-standing presence in the Australian market we have been able to build long-term partnerships with tenants and operators to develop existing and/or acquire new healthcare properties.”