“That new infrastructure is in addition to what is already in place,” he says. “At $A5-10 million for each of those medical centres, that is anywhere from $A175 to $A350 million investment in Sydney alone.”
By applying the same logic to other parts of the country - especially Melbourne and Brisbane - and to other types of healthcare assets outside medical centres, it is clear significant investment is needed in healthcare real estate assets outside of hospitals.
While some metropolitan areas, especially some inner city areas, may already be particularly well served, pockets of undersupply still exist in other geographies and specific sub-sectors across the country.
In some geographies, the real issue for service delivery is not on the demand side but on the supply side, Patrick noted.
“Operators face challenges in attracting staff to particular areas - and that is a real issue for them to address,” he says.
Meanwhile investors looking to acquire healthcare real estate assets are also increasingly competing with operators given the favourable outlook for the sector and asset characteristics, according to CBRE’s Healthcare & Social Infrastructure director Sandro Peluso.
“We are seeing more and more investors turning away from traditional residential or retail-based property investment. They are recognising the significant benefits within the wider commercial sector, particularly healthcare,” she says.
“The healthcare sector is one of the fastest growing sectors in Australia and investment in healthcare real estate assets not only offers a potential return on investment for astute investors but also an easy asset to manage.
“Investors recognise this class of asset usually involves an attractive long-term lease due to the tenant’s investment in a specialised fit-out and their location being important to their patients.”
Glen Fisher is Associate Director for Health at ANZ