Underscored by an improving economic back drop and increasingdemand for the provision of healthcare services, investors will soon have theopportunity to enter the defensive healthcare real estate sector with a minimuminvestment of only $10,000.
Established in 2022 as an open-ended, unlisted andsector-specific property fund, Centuria NZ Healthcare Property Fund Limited(the Fund) has a mandate to invest in strategically selected healthcare-relatedreal estate such as aged care facilities, private hospitals, medical centres,general practice surgeries and other healthcare-related facilities.
The Fund currently holds a portfolio of 21 geographically-diverseaged care properties, all with 26 year leases to one of New Zealand’s leadingand largest aged care operators, Heritage Lifecare, providing a long termincome stream. Built in rental growth is provided through annual CPI rentreviews, capped at 4%.
Centuria NZ, formerly Augusta Funds Management, is themanager of the Fund and has a strong 20-year track record. The well-establishedand experienced fund manager is part of Centuria Capital Group, withapproximately A$20 billion of Trans-Tasman assets under management includingcommercial, industrial, office, retail, healthcare, agricultural andself-storage properties.
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Mark Francis, Centuria NZ’s chief executive officerand a director of the Fund, says the Fund intends to re-open for investmentlater this month, with investorsable to take advantage of the downturn that occurred in the property market inrecent years by purchasing new shares in the Fund at 78 cents per share,compared to the original offer price of $1.00.
“These new shares will benefit from a 6.41% p.a.forecast pre-tax cash distribution for the financial periods ending 31 March2026 and 31 March 2027, paid to investors monthly.* Importantly, the Fund isstructured as a PIE and investors will also benefit from tax deductions claimedby the Fund, meaning that a favourable after tax return is forecast for thesame periods.”
The Fund intends to grow over time to provide exposureto a variety of healthcare real estate, with all future investments to bestrategically selected for their ability to continue to increasediversification within the healthcare property sector and contribute to thereturn to shareholders and capital growth of the Fund.
The current portfolio of Heritage Lifecare operatedproperties throughout New Zealand is independently valued at $172 million as at31 March 2025. Approximately 42 percent of the value is weighted towards the Auckland,Christchurch and Dunedin markets, with the remaining properties locatedregionally, catering to local demand where future bed shortages are forecast toemerge.
The leases are all “triple net”, insulating the Fundas landlord from all liability in relation to the current properties, to themaximum extent permitted by law. This is widely considered to be the mostlandlord friendly form of lease.
Francis says that the Fund’s properties provide a sought-after institutional grade investmentopportunity within the healthcare real estate sector and they expect very strong interest frominvestors.
“Investments of this calibre with an attractive tenantcovenant, 26-year triple net lease, geographically diverse portfolio andinflation-linked growth are difficult to find in the current market”
“With the Fund’s strong long-term fundamentals,combined with the improving economic backdrop, we believe it is an opportunetime to seek further investment in the Fund, laying the platform for furthergrowth and diversification in healthcare-related real estate.”
CenturiaNZ has appointed Bayleys Real Estate to market the Fund to investors. Mike Houlker, Bayleys’ head of funds andinvestment products, says that investors can benefit from both a strong tenantand a strong sector.
“Heritage Lifecare has an orientation towards theprovision of higher levels of care where higher margins are able to begenerated and operate in a sector seeing strong and increasing demand with NewZealand’s rapidly ageing population.”
“The sector also has benefits from high levels ofrecurring Government funding, estimated at 57% directly from the Government andan additional approximately 13% funded indirectly via residents’ pensions.”
The healthcare sector, particularly aged care, isexpected to see mounting demand in New Zealand, says Chris Farhi, Bayleys’ headof insights, data and consulting.
“The age of entry into aged care beds in New Zealandis typically 85 years and above. The growth of this age segment is expected tobe even more rapid, with a forecast rise from 100,000 people in 2024 to 500,000in 2078, 468% growth.
“Healthcare property benefits from long-termdemographic drivers and the fact that health expenditure is often mandatory. Theeconomy itself is not the key demand driver for the healthcare sector. This isdifferent from many other sectors which are relatively more sensitive to factorssuch as consumer or business sentiment, economic activity and unemploymentlevels.”
Applications for shares can be made viathe Product Disclosure Statement which will be available from Bayleys or byvisiting centuria.co.nz/healthcare once the offer opens.
- Article supplied by Bayleys and Centuria NZ
*Forecast pre-tax cash distribution for the financial periods ending 31 March 2026 and 31 March 2027, based on an issue price of $0.78 per share and forecast distributions of 5.00 cents per share per annum. Details of how the forecast pre-tax cash distribution is calculated and the risks associated with this investment will be set out in the Product Disclosure Statement, once available. Cash distributions are not guaranteed. Actual distribution rates may vary.
Centuria NZ Healthcare Property Fund Limited is considering making an offer of financial products in New Zealand. No money iscurrently being sought. No financial products can currently be applied for or acquired. If the offer is made, it will be made in accordance with the Financial Markets Conduct Act 2013. No indication ofinterest will involve an obligation or commitment to invest.
Prospective investors are recommended to seek professional advice from a financial advice provider which takes into account their personal circumstances before making an investment decision. The selling agents are not providing personalised advice. Important information about the financial advice service provided by Bayleys Real Estate Limited is available at bayleys.co.nz/funds.
