Overview

The RAM Healthcare Opportunity Fund (“HOF”) is an open-ended property fund aimed at building a portfolio of premium healthcare real estate assets in Australia through asset repositioning and development. It offers investors rare access to the scarce and defensive healthcare real estate asset class.

Strong capital return over medium term investment horizon

Low risk “build-to-core” strategy of premium Australian healthcare assets

Security of capital and liquidity options

Rare access to the scarce and defensive healthcare real estate

Invest with confidence given Real Asset Management’s listed track record and strict compliance and governance controls

HOF aims to be at the forefront of the evolving healthcare landscape, supporting the increasing demand for healthcare facilities and strengthening the resilience and growth potential of the Australian healthcare real estate market.

LOCATION	Metropolitan and larger regional cities in Australia
TARGET EQUITY RETURNS*	Targeting 16-18%* total return with 4-6% distribution target post portfolio establishment
BORROWING	Targeted gearing of 50% LVR (max 60% at a portfolio level)
TERM	Open-ended with quarterly liquidity facility
FUND TYPE	Registered, open-ended unit trust
UNIT PRICING	Monthly
DISTRIBUTION	Quarterly
MINIMUM INVESTMENT	$50,000
RESEARCH	Core Property rating : Recommended^{^}

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*Gross of fees. Investment returns are not guaranteed. Actual returns may differ from target returns for a range of factors including investment performance, taxation and indirect costs. Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the RAM Australia Healthcare Opportunity Fund. Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). The Investment Manager for the Fund is RAM Healthcare Property Investment Management Pty Ltd (ACN 667 163, AFSL No. 484263.) This material has been prepared by Real Asset Management Group to provide you with general information only. In preparing this material, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Real Asset Management Group, Equity Trustees nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the IM before making a decision about whether to invest in this product.

^The Core Property rating (assigned in June 2024) presented in this document has been prepared and issued by Core Property Research Pty Ltd (“Core Property”), which is an Authorised Representative ASIC number 1280479 of Core Property Research Holdings Pty Ltd (ACN 633 170 751, AFS License No. 518320) (Licensee), and trading as Core Property. Whilst the information contained in the report has been prepared with all reasonable care from sources that Core Property believes are reliable, no responsibility or liability is accepted by Core Property for any errors, omissions or misstatements however caused. Past performance information is for illustrative purposes only and is not indicative of future performance. The Core Property publication is not and should not be construed as, an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Any opinion contained in the Report is unsolicited general information only. Neither Core Property nor the Participant is aware that any recipient intends to rely on this Report or of the manner in which a recipient intends to use it. To access the full report, please visit www.coreprop.com.au. The rating is subject to change without notice and Core Property assumes no obligation to update the report.

Investment Strategy

Invest in the sought-after healthcare sector
Targeting a range of development, value-add, and core plus opportunities
Culture of active management and risk mitigation through depth of operator relationships
Integrated approach with in-house development and tenant/partner relationship management
Significant deal flow pipeline sourced both on and off market
Operator-led mandates and network planning initiatives

Key Seed Assets

19-21 Middle Street Cleveland, QLD

STATUS: SETTLED

The off-market site with development approval for an integrated medical hub was acquired for $6.5 million. The site is located in an underserviced metropolitan growth catchment east of Brisbane. RAM proposes to develop a circa 5,000 sqm medical hub with hospital, specialist consulting, and allied health services integrated over four levels with basement parking. RAM has secured ASX-listed Ramsay Health Care for a ~1,400 sqm day surgery on a 25-year lease.

20 Nellie Street Nundah, QLD

STATUS: SETTLED

The off-market medical development opportunity is located in Inner Brisbane, 7 km from the CBD, adjacent to the Queensland Health Nundah community center. The property is currently under construction, with an expected completion in the latter half of 2023. It will serve as a health, medical, and lifestyle precinct over 10,000 sqm (GFA) anchored by a top-tier private hospital operator with a new 25-year lease.

Fund Management Team

A management team with significant experience in asset and funds management, and property investment and management

Investment Management

Matthew Strotton

Executive Director, Head of Real Estate

Sam Wood

Director, Funds Management

Healthcare Project Sourcing & Delivery

Adam Thompson

Development Director

Andrew Browne

Senior Project Manager – Real Estate Development

Why Healthcare Assets?

Healthcare is a largely inelastic and non-discretionary expenditure with limited exposure to negative macro-economic factors. The Australian healthcare real estate sector is generally characterised by resilient and consistent income profiles, supported by state and federal governments which typically account for 60% of all funding.

Key demand drivers for Australian healthcare real estate

Economic, demographic, and social drivers continue to support the demand for Australian healthcare real estate.

Population and Life Expectancy

Australians over 65 are forecast to grow at 3.1% p.a. over the next decade. Government data estimates by 2055, average life expectancy will be 95.1 for men and 96.6 years for women.
Chronic Illness

67% of Australian adults are overweight or obese, 14.5% of people aged 18 years and over smoked daily. 1 in 20 (or 1.3 million) Australians had heart, stroke and vascular disease in 2022.
Government Spending

During 2021-22, spending on health by all governments amounted to $176 billion, which accounted for 20% of total government tax expenses and represented 26% of government tax revenue.
Real Per Capita Expenditure

Over the last 20 years, health expenditure has increased from $91 billion to $241 billion, an average growth rate of 4.0% per year, compared to average annual inflation of 2.4% over the same period.
Per Capita Utilisation

Over 20 million Australians had at least one long-term health condition, with 46.6% (or 11.9 million) reporting at least one selected chronic condition, according to the latest data released by the Australian Bureau of Statistics.

Sources: ABS Census Data, National Health Survey 2022, AIWH Report.

Recent trends in Australian healthcare

Disruptive trends, lifestyle changes and emerging technology, make Australian healthcare ever changing.

Day Surgery

Operating theatres in day hospitals have increased by 56% between 2000-16. Efficiency in surgery is leading to more convenience-based health solutions.
Mental Health

Private mental health hospitalisation increased between 2010-11 and 2020-21 at an average annual rate of 5%. Expenditure increased 4% between 2016-17 and 2020-21.
Private Health

Private episodes of care showed an increase of 7.3% on the previous quarter and up 4.4% over the year, in December 2022.
Medical Technology

Minimally invasive techniques and advance in anaesthesia result in less tissue damage and post-operative pain and require less time in hospital.

RAM Approach to Asset Selection

A top-down and bottom-up approach adopted for asset selection and risk tolerances that contributes to RAMʼs longer term strategic and near term tactical views.