Dexus, a well-known real estate platform, is preparing to launch a $200 million equity offering for its unlisted healthcare fund as demand for investments in the healthcare sector increases. This will be Dexus’ second share offering of this size in the current quarter.
The previous $220 million equity offering for the Dexus Healthcare Property Fund, completed in July, has already been used for Vital Healthcare’s $51 million acquisition of Southport Private Hospital. However, due to strong demand for investing in healthcare real estate as part of an alternative real estate strategy, Dexus is planning another $1.8 billion equity offering for the fund before Christmas.
Dexus, along with other real estate platforms, is increasing its exposure to alternative assets such as healthcare, data centers and rental housing due to low yields in traditional areas such as office buildings. Long-term rental agreements with important tenants and rent increases linked to the consumer price index make healthcare properties particularly attractive.
The acquisition of Southport Private Hospital, a private specialist hospital with a 20-year lease with Ramsay Health Care, fits well with the fund’s strategy. This investment provides access to the mental health and rehabilitation sub-sectors within the broader healthcare sector.
The previous equity offering reduced the fund’s leverage and created capacity for future acquisitions. Dexus’ unlisted healthcare fund has attracted investments from local and foreign institutions, pension funds and private investors. Its portfolio includes assets such as the North Shore Health Hub in Sydney, life sciences buildings in Melbourne’s Parkville district and a stake in the Royal Adelaide Hospital.
Dexus’ expansion into the healthcare sector is part of its broader effort to diversify its fund management activities beyond traditional sectors such as office buildings into infrastructure and healthcare.