Healthcare investment opportunity in Gisborne

A purpose-built healthcare and rehabilitation facility with a secure long-term lease has been placed on the market in Gisborne, offering investors exposure to a resilient and fast-growing sector.

The property at 505 Aberdeen Road in the suburb of Te Hapara is leased to Evolution Rehab Limited, part of Evolution Healthcare NZ, a leading private healthcare provider operating six hospitals and multiple specialist health and wellbeing services

The purpose-built facility operates as Evolve Rehabilitation Gisborne, a residential rehabilitation service providing personalised rehabilitation programmes for adults requiring short-, medium- or long-term support.

It comprises a live-in residential rehabilitation complex with 23 private bedrooms and associated amenities, six two-bedroom units configured as three duplexes on a separate title, and 21 on-site car parks. There is around 1,550sqm of floor area and the facility sits on a 7,698sqm site in the established Te Hapara precinct where there is minimal vacancy.

The asset generates net annual income of $457,358 per annum plus GST, with all outgoings fully covered under a triple net lease, providing a high degree of income certainty. Evolution Rehab Limited will commence an initial 10-year lease at settlement, with three further five-year rights of renewal giving a final expiry 25 years from lease commencement. There are regular scheduled rent reviews to CPI and market.

Tenders close on Thursday, 19 March, unless sold prior, through Mike Florance of Bayleys Gisborne.

Evolution Healthcare’s broader network includes hospitals, specialist day facilities, 43 community rehabilitation clinics, and 12 residential disability services nationwide reflecting continued growth and increasing collaboration with the wider health sector.

With defensive characteristics, strong tenant covenant, a hard-ratcheted lease, and alignment to a government supported sector, Florance says the property represents a compelling investment for private investors, syndicates, family trusts, and capital seeking exposure to essential healthcare services.

“This offering provides private investors with access to a resilient, non-discretionary and defensive asset class. It’s a well-located facility supported by a strong national operator who has shown commitment to the site through a new long-term lease.

“Globally the healthcare sector is headed into active growth territory as an ever-wider pool of investors look to commence or increase their exposure to this in-demand sector.”

Florance says Gisborne is experiencing ongoing investment confidence, with several commercial developments recently completed, strong building consent activity for both residential and non-residential projects, and significant iwi led initiatives contributing to regional growth.

“Local investors know our market and are loyal to Gisborne, however we do expect interest from outside the region too. A triple net lease is always a drawcard and for an investor looking for good returns underpinned by a site with scale and favourable zoning for future repositioning, the subject property delivers.

“We’ve seen some big commercial plays made recently in Gisborne which reflects steady confidence in this market.

“Given the strength of the tenant and the scarcity of healthcare investment assets in regional centres, we anticipate strong interest from a wide range of investors.”