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RAM fund finds fertile ground in Bowen Hills

This article originally appeared in Australian Financial Review.

The RAM Essential Services Property Fund has acquired a healthcare facility at Bowen Hills, in Brisbane’s inner north, for $20.5 million, as it builds out the portfolio of the newly listed property trust.

The recently refurbished, privately owned medical building at 1/36 Edmondstone Road changed hands through an off-market deal on an initial yield of 4.74 per cent. While the deal was struck before the fund went public last month, it went unconditional subsequently.

The facility has a 10-year average lease expiry and comprises 2158 sq m. Its tenant is a specialist fertility group and the centre includes an embryology laboratory, andrology facilities, procedure rooms and recovery areas.

JLL’s Simon Quinn, who brokered the property with colleagues Tim Jones and Sam Byrne said healthcare real estate was performing strongly, with the defensive nature of the asset class proving popular.

“We have seen an influx of capital looking to be placed as more and more investors focus on the sector. This is driving significant capital growth for medical centres, day hospitals and private hospitals.”

The essential services property trust managed by RAM listed on October 20 after raising $357 million in its initial public offer at $1 a security. 

With a market around $516 million, the property trust portfolio includes sites leased to private hospitals and supermarket chains such as Woolworths and Coles.

In the lead-up to the float, RAM had been busy bulking up the fund’s portfolio, adding five healthcare and medical assets for $76 million in mid-September.

RAM recently launched a new Diversified Property Fund, seeding it with a Canberra office building bought from Lendlease for $115 million.