Sydney’s Westmead Rehabilitation Hospital sells for $30 million reflecting 8.75% yield

Sydney’s Westmead Rehabilitation Hospital has been sold for $30 million, in a deal involving St Andrews Healthcare, Pulse Health, and Generation REIT.  

Located at 7 Coleman Street, the 61-bed private rehabilitation hospital is located in western Sydney’s Merrylands, three kilometres south of Parramatta and within close proximity of the Westmead Public Hospital and Westmead Private Hospital.  

This is the third private hospital that Colliers International Healthcare & Retirement Living has sold in twelve months.    

Shane Nicholson of Colliers International, who represented the vendor St Andrew’s Healthcare Pty Ltd in the transaction, said the sale was significant because private hospitals are such tightly held assets.  

“They rarely come onto the market, and when they do, they are often sold in off-market transactions,” he said.  

“There is high demand amongst buyers for these types of assets because Australia’s healthcare sector is such a solid and desirable sector for investors to be in. Asian REITs have also demonstrated an appetite for these assets.  

Mr Nicholson said that while private hospitals were generally sought after, the Westmead Rehabilitation Hospital was considered to be a particularly good asset because it is “one of New South Wales’ finest specialist rehabilitation hospitals”.  

Mr Nicholson said part of the sale had involved unwinding the existing leasing arrangements, which was negotiated over the past couple of months.  

“A new lease arrangement between publicly listed companies Pulse Health and Generation REIT has now been signed, resulting in the sale of the freehold interest of the property for $29.86 million, which represented a yield of 8.75 per cent to our client, St Andrew’s Healthcare Pty Ltd,” he said.  

Mr Nicholson said given the demand amongst buyers for private hospitals in Australia, the sale was a big win for both Generation REIT and Pulse Health.