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NorthWest Healthcare Properties REIT and Epworth HealthCare to launch 4.2 hectare, $600m Innovation, Education and Healthcare precinct for Geelong

Artist's impression of $600m Innovation, Education and Healthcare precinct for Geelong

Melbourne, Australia: NorthWest Healthcare Properties REIT (“NorthWest”) and Epworth HealthCare (“Epworth”) today announced a major new strategic initiative that is set to deliver a state-of-the-art innovation, education and healthcare precinct in Geelong and expanded facilities at the site where Epworth Richmond is located in inner-Melbourne.

Today’s announcement involves two transactions worth $127.6 million1, including the sale by Epworth to NorthWest of the following sites:

  1. 50% interest in Epworth Geelong in Waurn Ponds for $89.8 million
  2. 50% interest in ~4.2ha of adjacent development land at Epworth Geelong for $15 million and a commitment to create an integrated innovation, education and healthcare precinct
  3. 100% interest in Epworth ELIM in Richmond for $22.8 million plus a further $5 million option for the air-rights to further develop the site

The facilities are subject to a triple net leaseback for an initial lease term of 20 years with annual CPI rent increases, which will allow Epworth to continue to deliver and grow their renowned patient services backed by the property development, partnership expertise and capital of NorthWest.

As Australia’s leading healthcare infrastructure investors, NorthWest specialises in the ownership and development of market-leading hospital, health, and life sciences infrastructure and precincts.  NorthWest will be undertaking the Epworth investments via its wholesale fund.

President and Chief Executive Officer of Australia and New Zealand for NorthWest, Mr Craig Mitchell, said: “This is an exciting series of transactions for NorthWest creating a broader and deeper partnership with Epworth HealthCare, to support the delivery of health services for all Victorians. 

“All three transactions play to our core expertise, strengthening our relationship with Epworth, and unlocking an exciting pipeline of new health infrastructure at two major new precincts. 

“We look forward to bringing together the best experts in healthcare planning and infrastructure to deliver world-class facilities on each site,” Mr Mitchell said.

Dr Lachlan Henderson, Epworth Group Chief Executive, said the agreement frees up capital, supporting long term sustainability for Epworth.

“The agreement enables Epworth to focus on targeted growth, our ambitious digital program and innovation to deliver better outcomes for our patients, now and in the future,” Dr Henderson said.

“Importantly, our patient services will continue as normal. The strategic alliance with long term partner NorthWest means Epworth can further its vision of creating a health precinct in Geelong and develop the precinct in Richmond for the benefit of our community.

Our vision, Epworth 2025, underpinned by our new strategic plan, transformation projects and this partnership, ensures we remain focused on delivering exceptional evidence-based care for all Victorians.”

Geelong Innovation, Education and Healthcare Precinct 

Geelong is one of Melbourne’s largest growth corridors, with a steadily growing population and increasing need for critical healthcare infrastructure. With a development envelope of approximately 100,000sqm of gross floor area, across multiple stages over a 10+ year period, the estimated total development cost is approximately $600 million.

With ~4.2ha of land available for development at Epworth Geelong, NorthWest and Epworth will now prepare a multi-staged masterplan for future development of the site. Their vision is to create a leading health and education precinct bringing together health services, researchers, technology, and industry partners into one ecosystem. The site’s co-location with Deakin University’s Waurn Ponds Campus also offers extensive partnership, research and collaboration opportunities.

Mr. Mitchell said, “The opportunity of the Epworth Geelong site aligns closely to NorthWest’s investment and development principles – providing the opportunity to develop a precinct that will enable the delivery of world class healthcare services, innovation and education to Geelong and its surrounds.” 

Key areas of focus will include allied health and rehabilitation, medical research, industry partners and emerging technologies, aged care and retirement, childcare and health education among others.

Epworth ELIM development

The Epworth ELIM site in Richmond has potential development of ~5,000 sqm of gross floor area with a total project cost of approximately $23 million.  

Expansion opportunities across the site will be considered in line with the strategic vision set by Epworth and NorthWest and considered in conjunction with Epworth Richmond which has been providing healthcare services to the greater Melbourne area for more than 100 years.

The expansion will be undertaken in conjunction with industry experts John Wardle Architects, Urbis town planning and Heritage consultants Lovell Chen.

1 Transactions remain subject to FIRB approval