AMP Capital has reached financial close on a deal to acquire a 100% interest in Sydney's Royal North Shore Hospital and Community Health Services PPP project from the Royal Bank of Scotland (RBS).
AMP Capital will own the asset until October 2036. More than 70% of the equity will be acquired by AMP Capital's Community Infrastructure Fund (CommIF), with the remainder from AMP Capital-managed investors.
AMP Capital Head of Social Infrastructure & Aged Care Julie-Anne Mizzi said:
"The acquisition of Royal North Shore Hospital PPP further positions AMP Capital as the partner of choice for secondary social infrastructure assets in Australia and New Zealand and we are delighted to be adding Royal North Shore Hospital PPP to our portfolio.
"The market for social infrastructure investment in Australia remains strong and we expect to see further demand going into 2015. Investors like social infrastructure assets because of the limited or no demand risk; stable, government-backed, inflation-linked returns; attractive yield and low volatility; and the fact these investments have a positive community benefit."
Established in 1885, Royal North Shore Hospital is located in St Leonards, approximately six kilometres from Sydney's central business district, and has around 750 beds. The hospital and its associated health services meet the health needs of four local government areas: Mosman, Willoughby, Lane Cove and North Sydney. The PPP project involved the redevelopment of the site to consolidate and replace more than 50 out-dated buildings and replace them with purpose-built facilities equipped with the latest technology.
Ms Mizzi added:
"Royal North Shore Hospital and AMP Capital have both been serving the community in Sydney for more than 100 years. AMP Capital has strong investment expertise in healthcare as well as being one of the most experienced global infrastructure managers and we look forward to partnering with Royal North Shore Hospital and the New South Wales government during the next stage of its development."
AMP Capital was advised by Bank of Tokyo-Mitsubishi UFJ, which also acted as adviser on CommIF's acquisition of the Partnerships Victoria in Schools Project, a parcel of 11 schools located in the Greater Melbourne region, from RBS in November 2013.
Royal North Shore Hospital PPP will be CommIF's eleventh social infrastructure asset in Australia and New Zealand.