Malaysia’s PNB Said to Back $214M Investment in Elanor Healthcare Property Fund

Australia’s Elanor Funds Management has reportedly received help from Malaysian asset manager Permodalan Nasional Berhad to complete the A$289 million ($214 million) recapitalisation of the Elanor Healthcare Real Estate Fund.

The capital injection will provide a full liquidity event for investors in the fund and allow Elanor to expand its six-asset portfolio of healthcare properties across Australia, according to a Tuesday statement by property consultancy JLL, which advised Sydney-based Elanor on the transaction.

JLL said the recapitalisation was completed in partnership with “an Asia-based institutional real estate investor”. The Australian Financial Review and other media sources identified the partner as Kuala Lumpur-based PNB.

“Institutional investors see vast potential in Australia’s healthcare sector and the real estate assets necessary to support demand for evolving services,” said Luke Prokuda, JLL’s head of equity advisory for Australia. “JLL is delighted to have advised Elanor on facilitating further expansion in their healthcare portfolio and enhancing the attractiveness of the fund to a wider catchment of international and domestic investors.”

Six to Grow On

Elanor set up the property fund in March 2020 with the goal of providing wholesale investors direct access to income-generating healthcare real estate assets in Australia. Since inception, the fund’s portfolio has expanded to include six assets with a cumulative value of A$289 million.

The vehicle’s assets include 55 Little Edward Street in Brisbane, a multi-tenanted medical office and day surgery with 8,302 square metres (89,362 square feet) of net lettable area and an occupancy rate of 98 percent, and Pacific Private in Gold Coast, a seven-level medical office and day surgery with 7,946 square metres of NLA and an 85 percent occupancy rate.

The fund was recapitalised on a weighted average portfolio capitalisation rate of 5.1 percent, with the partnership establishing a new core mandate to invest in Australia’s healthcare real estate sector, JLL said.

The consultancy has advised on more than A$1 billion ($675 million) worth of fund recapitalisations with an equity value of over A$500 million in the past 12 months, it said.

Tall Orders

PNB, which as of 2021 managed assets valued at MYR 336.7 billion (now $76 billion), concentrates most of its real estate investment in Malaysia, including with the development of its Merdeka 118 skyscraper in Kuala Lumpur.

With a height of 678.9 metres (2,227.4 feet), the 118-storey mixed-use tower is set to become the world’s second-tallest building (after Dubai’s Burj Khalifa) upon completion in 2023.

The Malaysian asset manager also has a history in Australian real estate, having once owned the 41-storey Santos Place office tower in Brisbane. PNB sold the building to Singapore sovereign wealth fund GIC and Aussie fund manager Charter Hall for A$370 million ($281 million) in 2017.