The Australian Retirement Trust (ART) and property fund manager ISPT have secured a 99-year lease with St John’s College within the University of Sydney to develop a $585 million healthcare and life sciences hub in Camperdown, Sydney.
The project, a 50-50 joint venture between the ISPT Core Fund and ART, via a mandate with ISPT, is located within the growing Camperdown Health, Education and Research Precinct (CHERP), strategically positioned between the Royal Prince Alfred Hospital and the University of Sydney, the pair said in a statement on Thursday.
The new development will accommodate a mix of healthcare services, including an acute private hospital, medical consulting suites, specialist medical occupiers, and research and education facilities.
It is expected to meet the growing demand for healthcare services driven by Australia’s ageing population, with projections showing 22 per cent of Australians will be aged over 65 by 2026.
“Identifying and acting on market trends and conditions is critical to making informed investment choices that deliver strong returns for Australian Retirement Trust’s almost 2.4 million members,” said Mark Lee, senior portfolio manager – head of real estate at ART.
“Like many other OECD nations, Australia’s population is ageing. In combination with an increase in life expectancy, thanks to modern medical advancements, and overall population growth, these trends naturally lead to an increase in demand for domestic healthcare services, which is why Australian Retirement Trust sees value in this space.”
ISPT, as the development and investment manager, aims to lodge a development application in early 2025, with practical completion anticipated by 2029. The project marks ISPT’s third major healthcare-related initiative, bringing the total portfolio in this sector to $1.4 billion, including other facilities in Sydney and Melbourne.
“ISPT Core Fund is pleased to be co-investing alongside ART in this exciting opportunity,” said Doug Cain, group executive, head of funds management at ISPT.
“Given strong, underlying market drivers, we view healthcare and life sciences as a highly defensible asset class and as we continue to grow our mandate business by delivering bespoke strategies and opportunities for our investors, this transaction demonstrates our ability to bring in capital partners to execute on our sector strategy.”
According to the statement, Australian Retirement Trust expects to see an increasing demand for investment in quality healthcare services in the future. The fund believes investment opportunities in this sector provide strategic diversification benefits and help deliver strong long-term returns for members.
