Calvary is believed to be making preparations to put hundreds of millions of dollars’ worth of real estate assets on the market, making it the latest healthcare provider to find ways to source funds.
The company last year purchased aged-care provider Japara Health in a $380m buyout.
Calvary lifted its borrowings to buy the business and is believed to be interested in paying down its debt.
Collectively, the real estate portfolio of Japara is estimated to be worth about $400m.
It is understood that three aged-care facilities are on the market, collectively worth about $20m through real estate firm CBRE, but assets in other parts of its stable are also soon to hit the block.
Calvary owns Australian healthcare assets ranging from hospitals, retirement villages, community care facilities and nursing homes.
The company is a not-for-profit Catholic healthcare organisation established by the Sisters of the Little Company of Mary.
Companies in the healthcare industry – particularly aged care – are exploring asset sales as a way to offer funding boosts to their operating businesses at a time of staff shortages and rising costs.
One in the spotlight is Bupa, which recently tested buyer interest for its New Zealand business. However, experts believe that Bupa’s Australian business requires work to address challenges in the business before it would be in a state to attract a buyer.
Some residences are becoming obsolete and there are predictions that the healthcare provider may close a select group of facilities. Aged-care businesses and their properties are going backwards in price by at least 5 per cent due to the challenges facing the industry and a lack of clarity around revenue forecasts for 2023, say experts.
Aged-care providers are paid a refundable accommodation deposit by residents, with the money repaid by the provider when the resident leaves the home, minus agreed deductions from the cost of care.
New regulations for the industry are coming into force, but uncertainty remains about how they will work and where the staff will come from to meet the requirements.
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