Published 23 March 2006
ING Real Estate Australia has launched a healthcare property fund with 2 properties recently put under the management of Epworth Hospital, the main tenant in Calan Heathcare Properties Trust’s nearby Epworth Eastern Hospital.
When the managers of the ING Property Trust in New Zealand made a takeover bid for Calan at the end of January, they cut across negotiations Calan’s managers had been holding to sell assets, including the Melbourne properties, to another ING entity. Those negotiations stopped while the bid was in play.
The situation changed again on 9 March, when the ING trust pulled its bid (but bought more of Calan, taking the combined ING trust/ING NZ stakes to 19.98%) and the ING trust’s managers (ING (NZ) Ltd & Symphony Group Ltd in a joint venture) agreed to buy the Calan management company.
Temporarily, at least, 2 ING entities will be running hospitals separately in East Melbourne, unless the New Zealand-based managers farm the job out.
The ING Real Estate Healthcare Fund offer opens to Australian investors on Wednesday 29 March. The product disclosure document is on the ING website (ING Australia, via ING Global), but is available for viewing only by Australian residents.
The fund will receive rents from healthcare operators â€“ it won’t participate in the operation or management of any healthcare business.
The initial $A48.5 million portfolio comprises 2 properties ING bought from the Freemasons in December, with Epworth Hospital as the new operator. They’re the Epworth Freemasons Private Hospital and the Epworth Freemasons Private Hospital & Medical Centre, nearer the city centre than Epworth Eastern, the new hospital developed by Calan Healthcare Properties Trust with Epworth as 92% tenant.
The initial public offering will raise $A30.5 million. The offer is for a minimum parcel of $2000, units at $A1 with forecast pretax income distribution of 8.4%/year over the 14 months to June 2007, based on $A1, distributions to be 85% tax-deferred. The distribution forecast for 2008 is 8.6%.
ING Real Estate Australia’s other 7 funds include a community living fund, which has more than $A300 million of investments in old folks’ & student accommodation in Australia & the US.
Websites: Product disclosure statement
26 January 2006: ING seeks 20% of Calan as precursor to full bid
Attribution: Company statement, website, story written by Bob Dey for this website.