The land and buildings of an established medium-scale purpose-built facility in Whangārei providing hospital-level palliative and long-term care for the elderly has come to the market.
Located in a quiet residential street in an elevated position with good sun and views, Hummingbird Hospital at 93 Fourth Avenue in the city fringe suburb of Woodhill comprises buildings with a gross floor area of 1,033sqm on a freehold 2,630sqm site zoned General Residential.
The split-level buildings provide beds and care amenities for 35 residents, along with a two-bedroom flat.
There is a resource consent in place to expand the property to increase occupancy to 48 residents and 40 staff.
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The existing facility was developed in three stages through the 1980s and has been under current management by North Health Limited for nearly two years.
The property returns annual net income of $286,209 plus GST, guaranteed by Radius Residential Care Limited, with just over four years remaining on the initial 20-year term which commenced 1 November 2009.
There are a further two 15-year rights of renewal with a final expiry of October 2059 if exercised, and the lease offers a mix of fixed and market-based increases, with regular rental reviews.
Hummingbird Hospital is being marketed for sale by Nigel Ingham of Bayleys Whangārei in conjunction with Roger Seavill of Colliers, via a deadline private treaty campaign closing 22nd May, unless sold prior.
Stats NZ figures show one in 50 people in the New Zealand population are now aged 85-plus.
Forecasting says this statistic could increase to about 1 in 30 during the 2030s, and to about 1 in 20 in the 2040s, meaning the provision of residential and hospital care will be in high demand for this growing demographic, says Ingham.
"The aged-care asset class is attracting significant investment interest, with facilities operating under proven management structures seen as valuable additions to a diversified commercial portfolio.
"Private investors are seldom able to compete for institutional grade assets which attract the big players looking to aggregate on scale, so Hummingbird Hospital provides an opportunity to enter the sector at an accessible price point."
Bayleys recently sold a nationwide portfolio of aged-care assets operated by Heritage Lifecare, including one in Whangārei, proving the value seen in the sector.
Ingham says investors can take heart from the robust lease in place for Hummingbird Hospital and the likelihood of business continuity on the site.
"The lease structure offers an attractive return with both future renewal upside, and potential for above-average commercial returns given the demand for aged healthcare. Additionally, there is value-add potential via an expansion programme, with Resource Consent in place for this.
"Aged healthcare is a strategic and defensive asset class, and Hummingbird Hospital has a well-established tenant with significant commitment to the site.
"Facilities like this serve a valuable role by allowing residents to remain in their community while receiving hospital-level care - an important consideration for the residents themselves, their families and wider network.
Ingham says Bayleys Whangārei has seen a noticeable uplift in inquiry for tenanted investment properties this year, and deal numbers are tracking upwards, too.
"A more favourable lending rate environment and declining term deposit rates are undoubtedly having a lot to do with this.
"However, with so much volatility in global markets and the fluctuating US story, brick and mortar assets are increasingly attractive in the broader investment picture - especially when underscored by large landholdings.
"The subject property is in a prime location just 2km west of the CBD, with easy access to the highway network and city amenities, including Whangārei Hospital."
- Supplied by Bayleys
