Dexus Property joins Ramsay Health Care in private hospital play

The office property giant and Ramsay Health Care will build a 128-bed private hospital in Sydney’s St Leonards.

Dexus Property Group chief Darren Steinberg. Picture: Richard Polden

Dexus Property Group is making a move into the $172 billion healthcare sector, forging a partnership with Ramsay Health Care.

The office property giant has joined forces with the private healthcare provider founded by the late Paul Ramsay to build a 128-bed private hospital in Sydney’s St Leonards that will help consolidate the precinct as the country’s primary medical hub.

Dexus controls a 2.6ha site next to North Shore Private Hospital and will develop the hospital to be managed and operated for Ramsay Health on a rental basis.

Dexus secured the site at 12 Frederick Street in 2000 and has run it as a series of industrial units for 15 years before securing approval to rezone it to hospital this month. The group identified the site as trading stock but is understood to have struck the agreement with Ramsay Health Care at a time when healthcare opportunities are becoming more attractive.

“We have a heads of agreement for a long-term lease with a major operator for health facility to be constructed at 12 Frederick Street, St Leonards. The planning proposal has been endorsed by the council, and confirms strong interest in the sector and the strength of the location,” Dexus said.

“We are working with the community and council to achieve a beneficial outcome.”

The move by the listed group is significant as it allows the company to expand in a new asset class as development opportunities in the healthcare sector are growing.

Canadian giant Brookfield has flagged its desire to expand its book of healthcare-related projects, particularly in NSW, following state government commitments to major upgrades at Byron Central Hospital, the South East Regional Hospital at Bega, St George Hospital in Sydney and the new Northern Beaches Hospital.

Troubled building contractor CIMIC has also been vying for a number of the jobs, as has its former subsidiary John Holland, now owned by Chinese infrastructure giant CCCC International Holding and responsible for building the $1.2bn Perth Children’s Hospital.

Dexus and Ramsay’s new hospital will have operating theatres, an emergency department and on-site parking for 220 cars. It will also have a medical centre with a radiology and diagnostic imaging centre and specialist consulting rooms.