Clarence Property Successfully Launches New Aged Care Fund

Clarence Property has settled on a $90.2 million portfolio of four high quality aged care properties in South East Queensland, all leased to Bolton Clarke, Australia’s largest not-for-profit aged care provider.  The assets are secured by long-term triple net leases with a 22-year WALE and annual CPI-linked rental increases, that Clarence Property says provides strong income certainty.

Capital raising for the Clarence Property Aged Care Fund commenced in February  and has closed fully subscribed following strong demand from wholesale investors drawn to the fund and sector’s strong fundamentals.

The new fund represents a significant milestone for the diversified property funds manager and developer, underscoring growing appetite from investors for defensive, income-producing assets amid heightened volatility in equity markets.

Clarence Property CEO Simon Kennedy said “The strong investordemand reflects the quality of the underlying assets, the covenant strength of Bolton Clarke, and the compelling long-term fundamentals of the aged care sector which is a structurally undersupplied asset class.”

The fund is forecast to deliver a first-year distribution of 7.1 per cent per annum and an average 7.5 per cent per annum over a five to seven-year investment term, with a target internal rate of return exceeding 11 per cent.

Clarence Property’s Head of Capital Transactions Ben Somerville said the portfolio was deliberately constructed to deliver resilient, long-term income.

“These are high-quality assets in growth locations, secured at a meaningful discount to replacement cost and underpinned by a leading national operator,” he said.

“In the current environment, investors are increasingly seeking defensive income streams supported by strong tenants and long lease profiles.”

Brad Dicinoski, Clarence Property’s Senior Manager – Capital Raising, said the fund’s structure and timing were key drivers of demand.

“We saw strong interest from investors who have previously invested with Clarence Property and have confidence in us as a fund manager, as well as a significant number of new investors,” he said.

“With increased volatility in equity markets, many investors viewed this as a compelling opportunity to diversify into a defensive asset class offering attractive, regular monthly income.

The portfolio spans four assets in high-growth Southeast Queensland locations – Buderim, Beerwah, Cleveland and Burleigh Waters – areas characterised by ageing populations, rising property values and increasing demand for aged care services.

The successful close of the Aged Care Fund signals an important next step for Clarence Property as it expands its wholesale offering and targets future strategic investments.

Clarence Property, now has more than $950 million in assets under management through it’s flagship fund the Clarence Property Diversified Fund across commercial, retail, industrial and residential sectors and the new Clarence Property Aged Care Fund.

The portfolio was brokered by Mark Granter, Joe Tynan and Marcello Caspani-Muto of CBRE.