HMC Capital gets healthcare real estate boost

Funds house HMC Capital is riding the boom in alternative assets and has hit first close on its $1.3bn unlisted healthcare and life sciences real estate fund.

HMC Capital bought the Healthscope hospital portfolio in March. Picture: Bloomberg

Funds house HMC Capital is riding the boom in alternative assets and has hit first close on its $1.3bn unlisted healthcare and life sciences real estate fund after securing support from big global pension funds.

Investors are backing its plans in the sector and drove up its shares by 11c to $5.01 and the company is turning its attention to opportunities in the global arena where another fund is already being planned.

HMC Capital said it had secured $650m of equity commitments, including $251m from three major global institutional investors and $322m from its own listed HealthCo Healthcare & Wellness REIT.

A fourth institutional investor is currently undertaking advanced due diligence for the remaining equity commitment. HMC Capital will provide short-term underwriting support for this amount.

When HMC Capital bought the Healthscope hospital portfolio in March, it flagged the vehicle would initially own a portfolio of seven acute care hospitals leased to the leading Australian operator, Healthscope.

HMC Capital managing director David Di Pilla.

It successfully settled on $474m of Healthscope hospitals in May with upfront equity funding support from its listed fund. The unlisted fund will settle the remaining $470m with third-party institutional capital in early October, subject to Foreign Investment Review Board approval, which is expected to be received this month.

The company reaffirmed its fiscal 2024 distribution guidance of 12c and expects strong underlying earnings growth in fiscal 2024.

HMC Capital managing director David Di Pilla said the company‘s strategic partnership with Canadian giant and hospital operator Brookfield had helped secure the portfolio on attractive terms and would generate material recurring income for the group.

“There is significant and growing institutional investor demand from both Australian and global investors as they actively down weight from structurally challenged sub-sectors,” he said.

The unlisted vehicle has a substantial brownfield development pipeline in the existing Healthscope hospitals with an end value of $1.3bn based on committed projects. The fund is expected to realise positive valuation gains on completion of these developments

The vehicle is HMC Capital‘s second major unlisted play this year and its last mile logistics trust won support of big groups including FundsSA.

HMC Capital said it remained on track to hit its $10bn committed assets under management target by the year end, 12 months ahead of schedule.

HMC Capital head of funds management Nicholas Harris said the fund was a “high conviction strategy which is benefiting from global megatrends and expected to generate greater investor appetite over time”.