Work is under way to refit a new commercial building at Nundah as a mental health hospital after the site changed hands for $51.25 million.
Real Asset Management (RAM) has settled the deal on the 8523sq m site at 20 Nellie Street and has signed a 25-year lease with operator iMH for a 58-bed private mental health hospital to anchor the health precinct.
RAM filed revised plans with the Brisbane City Council for the site late last year to convert it from office use to medical.
Under the revised plans, 5000sq m of office space and a 954sq m childcare centre would make way for a 60-bed mental health hospital in the well-advanced development at 20 Nellie Street, Nundah, 7.5km north of the Brisbane CBD.
Earmarked for a five-storey, V-shaped building—one of five ranging from one to five storeys approved for the 8523sq m site—it would also include associated consulting suites.
RAM head of real estate Matthew Strotton said the deal involved a “bottom-up approach” in originating opportunities with operating partners.
Strotton said the developer had added about $18 million in value through planning and leasing, and reached occupancy of 68 per cent prior to settlement on the Nundah site.
“As the building was initially intended for office use, a refit is required to operate as a hospital,” Strotton said.
“Work is under way, and contractors are on site. All parties are working towards a proposed October, 2024 opening and things are progressing as planned.”
Strotton said they had worked closely with iMH—a joint venture between Aurora and Medibank’s Amplar Health—to identify suitable sites.
Aurora Healthcare had indicated strong demand for mental health services at many of its sites across Australia in the past four years.
“Nundah Private Hospital will provide integrated private mental health services to northern Brisbane communities. This new model of care in mental health private services is a first for the Brisbane area with the hospital set to open in the second half of 2024,” iMH director Julia Strickland-Bellamy said.
“Aurora Healthcare has delivered services to the greater Brisbane area for over 50 years through our Belmont Private Hospital.
“Nundah Private Hospital enables us to extend our services to the northside of Brisbane, with a new model of care, while also leveraging our years of expertise in private mental health specialisation.”
RAM funds management director Sam Wood said the asset manager had seen opportunity in the huge demand for mental health services in Queensland.
“Estimates of the state’s mental health bed shortage range between 400 and 2100, so there is a huge opportunity to supply the gap,” Wood said.
“Our healthcare opportunity strategy seeks to invest in these demand-driven opportunities when they present themselves.”
The broader risk mandate of its unlisted RAM Australia Healthcare Opportunity Strategy complements the ASX-listed RAM Essential Services Property Fund (REP) and provides greater access to properties across the portfolio according to Strotton.
