Underscored by an improving economic back drop and increasing demand for the provision of healthcare services, investors will soon have the opportunity to enter the defensive healthcare real estate sector with a minimum investment of only $10,000.

Established in 2022 as an open-ended, unlisted and sector-specific property fund, Centuria NZ Healthcare Property Fund Limited (the Fund) has a mandate to invest in strategically selected healthcare-related real estate such as aged care facilities, private hospitals, medical centres, general practice surgeries and other healthcare-related facilities.

The Fund currently holds a portfolio of 21 geographically-diverse aged care properties, all with 26 year leases to one of New Zealand’s leading and largest aged care operators, Heritage Lifecare, providing a long term income stream. Built in rental growth is provided through annual CPI rent reviews, capped at 4%.

Centuria NZ, formerly Augusta Funds Management, is the manager of the Fund and has a strong 20-year track record. The well-established and experienced fund manager is part of Centuria Capital Group, with approximately A$20 billion of Trans-Tasman assets under management including commercial, industrial, office, retail, healthcare, agricultural and self-storage properties.

Mark Francis, Centuria NZ’s chief executive officer and a director of the Fund, says the Fund intends to re-open for investment later this month, with investors able to take advantage of the downturn that occurred in the property market in recent years by purchasing new shares in the Fund at 78 cents per share, compared to the original offer price of $1.00.

“These new shares will benefit from a 6.41% p.a. forecast pre-tax cash distribution for the financial periods ending 31 March 2026 and 31 March 2027, paid to investors monthly.* Importantly, the Fund is structured as a PIE and investors will also benefit from tax deductions claimed by the Fund, meaning that a favourable after tax return is forecast for the same periods.”

The Fund intends to grow over time to provide exposure to a variety of healthcare real estate, with all future investments to be strategically selected for their ability to continue to increase diversification within the healthcare property sector and contribute to the return to shareholders and capital growth of the Fund.

The current portfolio of Heritage Lifecare operated properties throughout New Zealand is independently valued at $172 million as at 31 March 2025. Approximately 42 percent of the value is weighted towards the Auckland, Christchurch and Dunedin markets, with the remaining properties located regionally, catering to local demand where future bed shortages are forecast to emerge.

The leases are all “triple net”, insulating the Fund as landlord from all liability in relation to the current properties, to the maximum extent permitted by law. This is widely considered to be the most landlord friendly form of lease.

Francis says that the Fund’s properties provide a sought-after institutional grade investment opportunity within the healthcare real estate sector and they expect very strong interest from investors.

“Investments of this calibre with an attractive tenant covenant, 26-year triple net lease, geographically diverse portfolio and inflation-linked growth are difficult to find in the current market”

“With the Fund’s strong long-term fundamentals, combined with the improving economic backdrop, we believe it is an opportune time to seek further investment in the Fund, laying the platform for further growth and diversification in healthcare-related real estate.”

Centuria NZ has appointed Bayleys Real Estate to market the Fund to investors. Mike Houlker, Bayleys’ head of funds and investment products, says that investors can benefit from both a strong tenant and a strong sector.

“Heritage Lifecare has an orientation towards the provision of higher levels of care where higher margins are able to be generated and operate in a sector seeing strong and increasing demand with New Zealand’s rapidly ageing population.”

“The sector also has benefits from high levels of recurring Government funding, estimated at 57% directly from the Government and an additional approximately 13% funded indirectly via residents’ pensions.”

The healthcare sector, particularly aged care, is expected to see mounting demand in New Zealand, says Chris Farhi, Bayleys’ head of insights, data and consulting.

“The age of entry into aged care beds in New Zealand is typically 85 years and above. The growth of this age segment is expected to be even more rapid, with a forecast rise from 100,000 people in 2024 to 500,000 in 2078, 468% growth.”

“Healthcare property benefits from long-term demographic drivers and the fact that health expenditure is often mandatory. The economy itself is not the key demand driver for the healthcare sector. This is different from many other sectors which are relatively more sensitive to factors such as consumer or business sentiment, economic activity and unemployment levels.”

Applications for shares can be made via the Product Disclosure Statement which will be available from Bayleys or by visiting centuria.co.nz/healthcare once the offer opens.

Article supplied by Bayleys and Centuria NZ.

*Forecast pre-tax cash distribution for the financial periods ending 31 March 2026 and 31 March 2027, based on an issue price of $0.78 per share and forecast distributions of 5.00 cents per share per annum. Details of how the forecast pre-tax cash distribution is calculated and the risks associated with this investment will be set out in the Product Disclosure Statement, once available. Cash distributions are not guaranteed. Actual distribution rates may vary.

Centuria NZ Healthcare Property Fund Limited is considering making an offer of financial products in New Zealand. No money is currently being sought. No financial products can currently be applied for or acquired. If the offer is made, it will be made in accordance with the Financial Markets Conduct Act 2013. No indication of interest will involve an obligation or commitment to invest. Prospective investors are recommended to seek professional advice from a financial advice provider which takes into account their personal circumstances before making an investment decision. The selling agents are not providing personalised advice. Important information about the financial advice service provided by Bayleys Real Estate Limited is available at bayleys.co.nz/funds.