Property investor ISPT and superannuation fund HESTA have acquired a ground lease at St Vincent’s Fitzroy hospital campus in Melbourne and plan to develop it into a new $140 million commercial property.  

ISPT and HESTA have formed a new joint venture to acquire the 50-year ground-lease for 31 – 35 Victoria Parade in Fitzroy and will co-develop a 12,000 sqm ‘on hospital campus’ medical office building. 

The deal, which will see the ISPT Core Fund and HESTA each co-invest 50%, represents ISPT’s first direct property acquisition in the healthcare and life sciences sector. 

St Vincent’s has pre-committed to lease 5,000 sqm of the new property for 10 years.  

Architecture firm Bates Smart has designed the development proposal, which will retain the existing heritage-listed Brenan Hall and incorporate into the ground floor of the mixed-use healthcare accommodation building.  

The new property will feature St Vincent’s Hospital Melbourne, St Vincent’s Private Hospital Fitzroy and the Aikenhead Centre for Medical Discovery – Australia’s first collaborative, hospital-based biomedical engineering research centre. 

Robert Pepicelli, General Manager, Healthcare & Life Sciences at ISPT, said the St Vincent’s co-investment was an exciting new partnership for all parties.  

“We like the opportunity to combine the resources and expertise of ISPT, our investors’ aligned capital and our operator partners to ensure ongoing investment into the important healthcare and life sciences sector, which is a major employer and driver of economic activity in Australia,” Pepicelli said. 

“We are focussed on working with operators at the early stages of their real estate planning, to participate in the design, development and long-term ownership of the physical infrastructure which supports their operations.”  

HESTA Chief Investment Officer Sonya Sawtell-Rickson said the investment continued their focus on identifying opportunities in Australia’s fast-growing healthcare sector. 

“Our deep connection and knowledge of the health sector has been built over many years meaning we’re well positioned to take advantage of investment opportunities like this, that we hope will directly benefit our members through strong, long-term returns while also providing impressive medical office facilities for many St Vincent’s hospital staff,” Sawtell-Rickson said.  

St Vincent’s Health Australia’s Interim Group Chief Executive Officer Ruth Martin said it was an exciting development for St Vincent’s and for Melbourne’s healthcare landscape more broadly. 

“To be built alongside the under-construction Aikenhead Centre for Medical Discovery – and on the same grounds as St Vincent’s Hospital Melbourne and St Vincent’s Private Hospital Fitzroy – the planned development means more Australians will benefit from the ground-breaking clinical care and research carried out by St Vincent’s and our partners,” Martin said.  

Tom Byrnes from Charter Keck Cramer and Andrew Grant of APG Advisory brokered the transaction. 

Recent Australian healthcare property deals include APH Holding’s launch of the $320 million Wellington Health One development in Box Hill, Melbourne last month, as part of a larger multi-billion-dollar healthcare precinct.   

In May, Centuria acquired a 3,000 sqm site in Sydney’s inner-city suburb of Alexandria to develop into a new $163 million private hospital. 

Earlier this year, Australian Unity lodged development plans to build the new $150 million Matilda Meadowbrook private hospital in Brisbane’s south on behalf of the Australian Unity Healthcare Property Trust (AUHPT).