Malaysia’s $200-billion pension fund Employees Provident Fund (EPF) is investing A$100 million ($70 million) in an Australian healthcare real estate fund managed by real estate developer Dexus.
In a statement, the developer said EPF’s investment in Healthcare Wholesale Property Fund (HWPF) will enable it to acquire North Shore Health Hub, Stage 1 of the development at St Leonards currently held in Dexus’s trading portfolio. The healthcare facility is due for completion in late 2020.
The plan is to eventually expand the precinct to include a ‘medi-hotel’, build-to-rent housing and other amenities that will increase its end value to A$1 billion ($703 million)
“We are pleased to welcome EPF Malaysia onto our funds management platform, which enables the continued growth of HWPF, Australia’s high-quality healthcare wholesale property fund,” said Deborah Coakley, Executive General Manager, Funds Management, Dexus.
Launched in 2017, HWPF is Australia‘s first institutional, wholesale, open-ended healthcare property fund that allows investors to participate in an asset class with long-term potential. Its portfolio includes approximately A$370 million ($260 million) of properties (on completion value) and a weighted average lease expiry of 27.4 years.
EPF’s investment in HWPF comes as the Malaysian pension fund announced in February that it will tap new markets and work with other fund managers to weather the effects of global uncertainties.
EPF recorded a gross investment income of RM 50.88 billion ($12.48 billion) in 2018, where equity contributed 58 per cent. The fund has about RM 222.61 billion ($54.6 billion) worth of investments across 40 countries and 28 currencies, representing about 26.7 per cent of EPF’s total portfolio.
EPF’s last investment in Australia was in 2017, when it bought a 49 per cent stake in OSK Holdings Bhd’s Australian project Yarra Park City for $115.9 million. It was also the first overseas property investment by the Malaysian pension fund that year.
OSK’s Yarra Park City holds the rights to a five-acre, mixed-use development Melbourne Square in Southbank, Melbourne and has a gross development value of over $2.1 billion.