Generation Healthcare is a Real Estate Investment Trust (REIT) that specialises in buying medical office buildings, clinics, hospitals and – recently – aged care facilities from operators. It gives the purchase price in cash to the operators and then leases the properties back to them. The idea is they free up cash for the operators to build new premises.
In May last year RSL Care (QLD) sold to Generation Healthcare and leased back three aged care facilities, delivering RSL $45.8 million.
Now Canada’s NorthWest Healthcare has purchased Generation Healthcare Management for A$58.5M from APN Property Group and senior executives.
Among the reasons for the purchase: “Australia is the world's 5th largest private healthcare market with large, sophisticated healthcare operators seeking real estate capital”.
Generation Healthscope owns 17 properties including hospitals, medical centres, laboratories, residential aged care facilities and other purpose-built healthcare facilities, valued at $439M.
Sale and leasebacks are becoming more attractive for aged care operators as demand to build aged care facilities far exceeds supply. Each new aged care bed cost $250,000+ to build.
