Evergreen grants “Commended” rating for Elanor Healthcare Real Estate Fund 

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Specialist alternatives research firm Evergreen Ratings has assigned a “Commended” rating to the Elanor Healthcare Real Estate Fund which is forecasting a distribution yield of 7.4% pa in FY2021.

The unlisted property fund currently comprises four multi-tenanted healthcare focused properties, with total value of $183.45 million (as at November 2020).

The fund is managed by Elanor Funds Management Limited, which part of the ASX-listed Elanor Investment Group (ASX:ENN).

The report observes the Fund gearing on establishment in March 2020 was 65% and that it is the Investment Manager’s intention to progressively reduce the Fund gearing to approximately 50% with successive acquisitions geared at 50% and any contribution of upwards property valuations.

Evergreen Founder and CEO Angela Ashton says: “For over twenty years, the healthcare sector has by and large been a positive contributor to the overall performance of both the alternative property investment markets and to the Funds holding assets in the sub-sector.

“Australia’s ageing population is considered a driver of demand for medical services. The Healthcare sector has the potential to emerge as a core real estate sector. Economic activity and employment growth in the healthcare sector are the fastest growing since the GFC and we believe property funds will benefit from these investment opportunities.”

“The trends in the industry in recent times include:

  • Demand increases in line with an ageing and increasing population;
  • Higher day procedure centre usage;
  • New hospital developments integrating allied services such as pathology, pharmacy and radiology;
  • Ongoing changes to private health insurance; and
  • Viability of smaller medical and surgical hospitals threatened, partly due to the significant capital and operating costs.”

“Elanor Investors Group has over $2 billion of assets under management and since listing in 2014, has achieved an average pre-tax total return to investors, after fees, of approximately 20% p.a. on all realised investments,” said David Burgess, Elanor Co-head of Real Estate.

“The Elanor Healthcare Real Estate Fund’s strategy is to invest in healthcare real estate assets including multi-tenanted medical centres, diagnostic facilities, day surgeries, specialist treatment facilities and private hospitals.

“We then actively manage the fund’s assets to optimise the use of the properties and are looking to acquire additional healthcare real estate assets to build scale and diversification,” Mr Burgess said.

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