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Vertazen Group European Healthcare Opportunity Fund

Target total return*
16- % 3 Year IRR
Invest in the highly sought-after healthcare real estate sector
Distribution
4- %
Target distribution post portfolio establishment
HOF aims to be at the forefront of the evolving healthcare landscape, supporting the increasing demand for healthcare facilities and strengthening the resilience and growth potential of the Australian healthcare real estate market.

Overview

Vertazen Group Healthcare Opportunity Fund (“HOF”) is an open-ended property fund aimed at building a portfolio of premium healthcare real estate assets in Europe through asset repositioning and development. The fund offers investors a rare opportunity to invest in the scarce and defensive healthcare real estate asset class.

Strong capital return over medium term investment horizon.

A low-risk "build-to-core" strategy focused on premium healthcare assets in Europe.

Security of capital and liquidity options

Rare access to the scarce and defensive healthcare real estate.

Invest with confidence given Vertazen Group listed track record and strict compliance and governance controls.

LOCATION Metropolitan and Europe larger regional cities in Germany
TARGET EQUITY RETURNS* Targeting 16-18%* total return with 4-6% distribution target post portfolio establishment
BORROWING Targeted gearing of 50% LVR (max 60% at a portfolio level)​​
TERM Open-ended with quarterly liquidity facility
FUND TYPE Registered, open-ended unit trust
UNIT PRICING Monthly
DISTRIBUTION Quarterly
MINIMUM INVESTMENT $50,000
RESEARCH Core Property rating : Recommended

Investment Strategy

  • Invest in the sought-after healthcare sector
  • Targeting a range of development, value-add, and core plus opportunities
  • Culture of active management and risk mitigation through depth of operator relationships
  • Integrated approach with in-house development and tenant/partner relationship management
  • Significant deal flow pipeline sourced both on and off market
  • Operator-led mandates and network planning initiatives
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Key Seed Assets

19-21 Mittelstraße, Frankfurt, Hesse

STATUS: SETTLED

This off-market plot, approved for the development of a mixed-use healthcare center, was acquired for $6.5 million. The site is located in an underserved metropolitan growth area in eastern Frankfurt. Vertazen Group plans to develop a healthcare center of approximately 5,000 square meters, integrating a hospital, specialist consultations, and ancillary medical services into a four-story building, complete with an underground parking garage. Vertazen Group has signed a 25-year lease agreement with Ramsay Health Care, listed on the German Stock Exchange, for a 1,400 square meter space for a day surgery facility.

20 Nelliestraße, Frankfurt, Hesse

STATUS: SETTLED

This off-market healthcare development opportunity is located approximately 7 kilometers east of downtown Frankfurt, adjacent to the Frankfurt Health Community Center. The property is currently under construction and is expected to be completed in the second half of 2023. It is planned to be developed into a health, medical, and lifestyle mixed-use area of over 10,000 square meters, with a top-tier private hospital operator as the anchor tenant, and a new 25-year lease agreement in place.

Why Healthcare Assets?

Healthcare is a largely inelastic and non-discretionary expenditure with limited exposure to negative macro-economic factors. The healthcare real estate sector in Europe is typically characterized by resilient and stable income profiles, supported by state and federal governments, which generally account for 60% of all funding.

Key demand drivers for healthcare real estate in Europe
Economic, demographic, and social drivers continue to support the demand for Australian healthcare real estate.
Population and Life Expectancy

Europe over 65 are forecast to grow at 3.1% p.a. over the next decade. Government data estimates by 2055, average life expectancy will be 95.1 for men and 96.6 years for women.

Chronic Illness

67% of Europe adults are overweight or obese, 14.5% of people aged 18 years and over smoked daily. 1 in 20 (or 1.3 million) Australians had heart, stroke and vascular disease in 2022.

Government Spending

During 2021-22, spending on health by all governments amounted to $176 billion, which accounted for 20% of total government tax expenses and represented 26% of government tax revenue.

Real Per Capita Expenditure

Over the last 20 years, health expenditure has increased from $91 billion to $241 billion, an average growth rate of 4.0% per year, compared to average annual inflation of 2.4% over the same period.

Per Capita Utilisation

Over 20 million Europe had at least one long-term health condition, with 46.6% (or 11.9 million) reporting at least one selected chronic condition, according to the latest data released by the Europe Bureau of Statistics.

Recent trends in Europe healthcare
Disruptive trends, lifestyle changes and emerging technology, make Australian healthcare ever changing.
Day Surgery

Operating theatres in day hospitals have increased by 56% between 2000-16. Efficiency in surgery is leading to more convenience-based health solutions.

Mental Health

Private mental health hospitalisation increased between 2010-11 and 2020-21 at an average annual rate of 5%. Expenditure increased 4% between 2016-17 and 2020-21.

Private Health

Private episodes of care showed an increase of 7.3% on the previous quarter and up 4.4% over the year, in December 2022.

Medical Technology

Minimally invasive techniques and advance in anaesthesia result in less tissue damage and post-operative pain and require less time in hospital.