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ISPT teams up with super funds for $600m co-investment

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By Reporter
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5 minute read

The property fund manager has partnered with HESTA and UniSuper to support the development of a new health facility in NSW. 

ISPT has announced the establishment of a new partnership with HESTA and UniSuper, as part of the Plenary Health consortium, led by investor and developer Plenary Group. 

The firms have completed a transaction with UNSW Sydney to develop a $600 million Health Translation Hub (HTH) project in the Randwick Health & Innovation Precinct. 

As part of the arrangement, ISPT (via ISPT Core Fund), HESTA (via a healthcare property mandate with ISPT), and UniSuper (via mandate and advisory agreements with ISPT), have each committed to co-investing 33.3 per cent in an ISPT investment vehicle holding the majority of the investment. 

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The deal follows a tender process involving both domestic and international developers and investors looking to securing the project — to be developed on land owned by the Health Administration Corporation (HAC) and leased to UNSW. 

UNSW is now expected to enter into a Project Deed with the Plenary Health consortium to help design, develop, fund, and grant a sub-ground lease to own the property on completion. 

The new 15-storey health education and research building is tipped to span a net lettable area of 30,927 square metres, supported by an initial 20-year commitment from UNSW to occupy 65 per cent of the available space.

The remaining 35 per cent of the property is expected to remain open to industry within the health, research, and education sectors. 

The project — which received a $1.5 billion investment from the NSW government — was granted State Significant Development Application (SSDA) consent in 2021. 

Plenary, which is both an investor and the development and asset manager for the project, has engaged Hansen Yuncken as the design and construction partner and Architectus as lead architect.

The designers have been tasked with ensuring the precinct can enable physical integration via sky bridges connecting the UNSW Kensington Campus, the Randwick Health Campus and the future Minderoo Children’s Comprehensive Cancer Centre. 

The development is also expected to target ESG objectives, including a 6-Star Green Star Rating, net zero carbon emissions, full electrification, 100 per cent renewable energy, PV solar installation and a 5.5 Star NABERS Energy rating. 

Construction of the HTH is slated to commence in 2023, with completion expected in 2025. 

Robert Pepicelli, general manager, Healthcare & Life Sciences at ISPT said the investment decision was driven by “strong market fundamentals” in the healthcare and life sciences sector.

“This latest partnership reflects our desire to invest in real estate for a purpose in terms of health, medical research and education; allowing ISPT to play a pivotal role in one of NSW’s largest co-located healthcare anchored precincts,” Mr Pepicelli said. 

This latest investment builds on ISPT’s joint venture partnership with HESTA to acquire a 50-year ground lease from St Vincent’s Health Australia.

“…This project aligns with our growing capability in the space, as we focus on creating partnerships that combine the resources and expertise of ISPT with our investors and operator partners to shape the future of the important healthcare and life sciences sector,” Mr Pepicelli added. 

“The NSW government’s considerable investment in the Randwick Health & Innovation Precinct, together with UNSW’s clear ambition to address some of society’s most important health challenges, will see the HTH positioned at the forefront of international health research and education, fostering the translation of research into commercial outcomes and driving further investment in the precinct which ISPT along with its joint investment partners is excited to be a part of.” 

Debby Blakey, CEO at HESTA welcomed the opportunity to build on the super fund’s long-term investment in health and life sciences. 

“This exciting investment in what can be a critical health, education and research precinct can help deliver strong, long-term returns for HESTA members, while supporting future jobs, and growth in our economy and better health outcomes for many in our society,” Ms Blakey said. 

“This is the latest investment made through HESTA’s $430 million health care property mandate, and we continue to look for opportunities in the sector, which is expected to see some of the strongest jobs growth over the next four years.”

John Pearce, Chief Investment Officer at UniSuper noted the importance of supporting education and research in the health space. 

“The investment will target significant sustainable objectives including a 6-Star Green Star Rating and a 5.5 Star NABERS Energy rating. This is a natural fit for UniSuper given our rich heritage in the higher education and research sector,” Mr Pearce said. 

“UniSuper has a strong cash position, and we continue to look for quality investments that help our members grow their retirement savings. We’re confident this will provide a great return for our members, and pay dividends in research outcomes for many years.”

[Related: HESTA ups pressure on ASX 300 companies]

ISPT teams up with super funds for $600m co-investment

The property fund manager has partnered with HESTA and UniSuper to support the development of a new health facility in NSW. 

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