Investing in Australia: A Deep Dive on EG
Date & Time: Wednesday, August 12th | 4PM - 5PM EDT
Hosted by: Thesis Driven
For the past decade, American capital seeking stability offshore landed in Europe or in emerging markets with a growth story attached. Australia got skipped.
That is a strange outcome for one of roughly ten countries rated AAA by all three agencies, a market that went about thirty-four years without a recession, and one of the few developed economies whose population is still climbing.
The more useful feature sits at the other end of the trade. Australia requires workers to save for retirement, which has built a A$4.4 trillion superannuation pool on its way to A$8 trillion, and that money has to be deployed at home. What it buys is stabilized, income-producing portfolios.
Meanwhile, in the US, many of the best risk-adjusted returns of the last cycle came from one repeatable move: find a boring asset class still owned by mom-and-pops, roll up the scattered pieces, professionalize the operations, and sell the assembled portfolio to an institution at a lower cap rate than was paid for the parts. Self-storage, manufactured housing, car washes, RV parks, vet clinics. Money was made twice, once on the operational lift and again on the cap-rate compression.
In Australia, medical office is one of the prime sectors to apply this playbook. Roughly 92 percent of the country's A$150 billion of healthcare real estate sits outside dedicated fund managers, held by governments, operators and private owners. Construction costs are up more than 40 percent since early 2020, which has halted new supply, and capital-constrained vendors have been selling buildings piecemeal and off-market at discounts of more than 25 percent to replacement cost.
Underneath all of it, the Commonwealth is putting A$7.9 billion of new money into Medicare, the largest single investment since the program began more than forty years ago, aimed at bulk-billing 90 percent of GP visits by 2030.
EG, one of Australia's largest independent real estate platforms with about A$3.2 billion under management, built a dedicated healthcare team to run that play. Mainstream Australian cap rates sit below local bond yields, so this cannot be sold as a yield trade. The edge is operational, and it comes from a document most landlords never open: the medical operator's own P&L.
Join us for a conversation with the EG healthcare team on why Australian primary care real estate is mispriced, what the superannuation bid means for an assembled portfolio, and why the window is defined by information rather than by rates.
In this session, we'll cover:
Why the most stable economy in the Pacific stayed under-owned by American private capital while Europe absorbed the flows
How the largest Medicare expansion in forty years, A$7.9 billion, is pushing volume into neighbourhood medical centres as the 65-plus cohort grows 25 percent by 2035
Why 92 percent of Australia's A$150 billion of healthcare real estate still sits outside dedicated fund managers, with the largest primary care operator running under 3 percent of sites
Why the rent on a medical centre is a function of doctor recruitment, and how moving one Victorian centre from 6.3 to 8.3 full-time-equivalent doctors lifts net rent 22 percent
What the repositioning looks like in practice at Highlands Health Centre on the Gold Coast, acquired at roughly half replacement cost on an 8.2 percent initial yield
How a A$4.4 trillion superannuation pool, heading to A$8 trillion and required to deploy domestically, makes the exit the easiest part of the trade
Speakers Include:
The Team
Shay Ramalingam – EG
The Interviewers
Brad Hargreaves – Thesis Driven
Paul Stanton – Thesis Driven
Register now to hear how EG is applying the American roll-up playbook to Australian medical office, and why Australian primary care real estate is under-owned and trading below replacement cost