An opportunity underpinned by location: why the Cromwell Healthcare Property Fund - Cromwell Funds Management
Select your country Global Cromwell Property Group Asia Pacific Australia Cromwell European REIT New Zealand Europe Cromwell Property Group Europe Germany Denmark France Benelux Sweden Czech Republic Finland Italy Poland UK
Person typing on a laptop

Learn

Home An opportunity underpinned by location: why the Cromwell Healthcare Property Fund
June 12, 2024

An opportunity underpinned by location: why the Cromwell Healthcare Property Fund

Colin Mackay, Research and Investment Strategy Manager, Cromwell Property Group

 

As a property segment, medical centres have all the right ingredients to provide a compelling investment opportunity – industry-wide structural tailwinds, strong fundamentals resilient to economic cycles, alignment to government funding, and attractive investment characteristics. But like any real estate investment, location matters. In this short article, we’ll outline some of the factors that make the Cromwell Healthcare Property Fund (Fund) stand out, with its proposed acquisition of 16 Playford Boulevard, Elizabeth, South Australia (the Property).

Catchment characteristics

Demand for healthcare is closely linked to population growth, particularly amongst those aged over 65. The Property is located in the fastest growing region in South Australia (Outer North), with total population growth of 2.8% p.a. projected from 2021-31, and growth in the 65+ segment projected to be even more significant (4.3% p.a.). At a more granular level, the Local Government Area (LGA) in which the Property is located (Playford), is projected to see the third strongest population growth over the period, at 2.9% p.a.1 

 

 

Low socioeconomic status is linked to higher incidence of disease and greater need for care. Due to cost, those with more socioeconomic disadvantage have lower rates of private health coverage2. They are also less likely to see a health practitioner but more likely to visit an emergency department2, resulting in a greater number of avoidable hospital presentations which unnecessarily take up valuable resources. The Property is located in the fourth most disadvantaged LGA in South Australia (out of 71) and the lowest socioeconomic LGA within metropolitan South Australia3, which Cromwell believes indicates significant demand within the catchment for affordable, public-aligned healthcare services, such as those provided at the Property.

 

 

Important node in the Local Health Network

The Property is leased entirely to a South Australian government healthcare operator, which provides a number of important healthcare services for the Northern Adelaide Local Health Network (NALHN), including outpatient services. The main hospital servicing the NALHN, the Lyell McEwin, is the third busiest hospital in South Australia and has the highest number of non-urgent presentations4. The percentage of emergency department patients commencing treatment within the recommended time is the second lowest across South Australia5. The Property operating as a GP Plus Health Care Centre aims to help to reduce the number of unnecessary hospitalisations and better respond to the health needs of local communities6.

The Property is well placed to meet the needs of the catchment, forming part of an essential services precinct adjacent to the major shopping centre of the region. The location provides significant car parking and convenient road access, and is in close proximity to rail and bus public transport. With a substantial site area of nearly 12,000 square metres, the Property also has the potential to expand in line with growing demand for services within the region, providing continuity of care for patients.

A unique proposition

As detailed in the Product Disclosure Statement, the Fund presents a unique investment opportunity, underpinned by a property with an attractive location and catchment characteristics. The Property is located in a fast-growing region with significant need for healthcare services. The Property is well placed to meet the needs of the catchment, providing a broad range of affordable, public-aligned healthcare services. The precinct benefits of the location, adjacent to a major shopping centre and with convenient access to public transport and car parking, further enhances its long-term appeal.

 

Footnotes
  1. Medium series population projections, Jun-23 (Government of SA; Cromwell)
  2. Patient Experiences 2022-23 (ABS)
  3. Socio-Economic Indexes for Australia, 2021 (ABS)
  4. Emergency department care activity 2022-23 (AIHW)
  5. Emergency department care access 2022-23 (AIHW)
  6. GP Plus Health Care Services and Centres, SA Health.
Disclaimer

This correspondence has been prepared for information purposes and is not a product disclosure document or any form or offer to invest in the Cromwell Healthcare Property Fund (Fund) under the Corporations Act 2001 (Cth) (Corporations Act). This document does not constitute personal financial product or investment advice (nor tax, accounting or legal advice) nor is it a recommendation to subscribe for or acquire securities or other financial products and it does not and will not form any part of any contract for the subscription or acquisition of securities or other financial products.

Cromwell Funds Management Limited ABN 63 114 782 777 AFSL 333 214 (CFM) is the responsible entity of and issuer of the Cromwell Healthcare Property Fund ARSN 676 931 838 (Fund). In making an investment decision in relation to the Fund, it is important that you read the Product Disclosure Statement dated 27 May 2024 (PDS) and the Target Market Determination (TMD). The PDS and TMD are issued by CFM and are available from www.cromwell.com.au/chpf, by calling Cromwell’s Investor Services Team on 1300 268 078 or emailing invest@cromwell.com.au.

This communication has been prepared without taking account of your objectives, financial situation and needs. All investments involve risk and before making an investment decision, you should consider the PDS and TMD and assess with or without your financial or tax adviser whether the Fund is appropriate for you having regard to your objectives, financial situation and needs.

Any ‘forward-looking statements’ are not guarantees of future performance but are predictive in nature and are subject to known and unknown risks, uncertainties and other factors which may be beyond the control of CFM. CFM does not represent or warrant that such ‘forward-looking statements’ will be achieved or will prove to be correct, and actual variations from the projections or estimates may be material. You are cautioned not to place undue reliance on any forward-looking statements.

Cromwell Healthcare Property Fund

Healthcare property investment opportunity | Open for investment

Register now