GFH Financial Group announced the expansion of its medical office/clinic segment with its second clinic portfolio in the United States of America in a transaction valued at approximately US$400 million.
According to a company statement, the income-generating portfolio consists of 11 assets of geographically diverse assets spread across four US states, California, Texas, Maryland and Louisiana.
The portfolio covers an area of more than 1 million square feet and is occupied by major, creditworthy, investment grade tenants, including Baylor Scott & White (Moody's Aa3), Texas A&M University Health Sciences Center (Fitch: AAA), Texas Tech University (Fitch). : AA+), Memorial Hermann (S&P: A+) and Tidal Health (Moody's: Aa3). Al Osool also offers unique specializations within their respective sub-markets, enabling them to achieve high occupancy rates and rental growth.
One of the main factors supporting investment is the strong performance of the medical clinics sector, which has proven to be highly resilient in the face of the economic downturn, with rent collection reaching 99% during the COVID-19 pandemic.
In addition, the occupancy rates of medical clinics reflected the strong demand for this sector during the first half of 2022 according to “Colliers” who reaffirmed the resilience of this sector.
The sector also continues to benefit from population growth and the aging population in the United States of America and the consequent steady increase in healthcare expenditures, which accounted for 19% of the US GDP in 2021, as well as the continuous increase in demand for outpatient services that Advance in the medical clinics sector.
This investment builds on the partnership with Big Sky Medical, a well-known and experienced asset manager focused on medical assets, with a proven track record of acquiring and managing healthcare properties.
Big Sky officials have invested in approximately 6 million square feet of approximately 100 medical assets across 19 states, with a current portfolio totaling $2 billion.
GFH aligns its interests with Big Sky Medical as both companies take a strong interest in investing and accumulating assets in the high-demand and resilient medical sector.
GFH's partnership with Big Sky has already resulted in a number of acquisitions valued at approximately $500 million in the past six months alone. This is the third transaction in a series of joint acquisitions.
Mr. Nael Mostafa, Co-Head of Investment Management - Real Estate at GFH, said: “We are pleased to announce the acquisition of this premium, income-generating clinic portfolio as part of GFH’s continued expansion of the medical office building segment in fast-growing cities across the United States. .
We strongly believe in the long-term underpinnings of the healthcare sector and the dynamics that underpin the increasing demand for quality medical offices, including an aging population and growth in outpatient care that continue to make the sector highly resilient and unaffected by economic cycles. We look forward to working with our partner Big Sky Medical to maximize the value of these assets.
To date, GFH has built a $1 billion portfolio of assets in the US medical office building sector.
