Plenary closes on $109m Melbourne hospital extension

The PPP specialist will lead a nearly 50% expansion of Casey Hospital, its first equity investment.

A consortium of Plenary Group, Watpac and Brookfield Global Integrated Solutions has reached financial close on the A$135 million ($109 million; €90 million) extension of Casey Hospital, in south-east Melbourne.

The project will add 13,000 square metres and 160 beds to the hospital, along with its first intensive care unit. The original 22,000-square-metre hospital – Plenary’s first equity investment – has a net present value of A$120 million.

The hospital’s equity investors – which alongside Plenary include Palisade Investment Partners and CDPQ – will provide equity for the expansion. In addition to being Plenary’s first equity deal, the original hospital project was also one of CDPQ’s first direct investments in Australia, part of a 2012, A$139 million partnership to invest in five Plenary PPP projects.

The Plenary-led consortium will be charged with designing, building and maintaining the extension for 10 years. This aligns with Plenary’s responsibility for the original hospital construction, which reached financial close in 2002 and included a 25-year contract expiring in September 2029. The procurement for the extension was completed through the original legal framework, Plenary said.

Construction on the extension is expected to be completed by the end of 2019.

Plenary – which has projects in Australia, the US and Canada in its portfolio – has been active in the hospital space. In March, the firm reached financial close on a $685 million mental health facility in Toronto. Last October, Plenary reached a C$1.3 billion ($1.1 billion; €900 million) financial close to build Toronto’s Mackenzie Vaughan Hospital.