Hospital-adjacent healthcare precincts are growing as developers and investors look to get a foothold in the alternative asset class.
Centuria managing director of healthcare Andrew Hemming, who is speaking at The Urban Developer Healthcare Property vSummit on the healthcare sector, said it was a “natural evolution” for healthcare-adjacent precincts to grow and accommodate key workers, medical students, and university campuses.
The healthcare fund has 64 assets dotted across Australia and a healthy pipeline of private day hospitals and healthcare-adjacent developments, including key worker and short-term accommodation.
“Delivering the right type of accommodation which is for key workers (in medical precincts) is a focus for us,” Hemming said.
“It is a natural evolution for healthcare precincts.”
Hemming pointed to an example at Orange, NSW where public and private hospitals, a university campus, a medi-hotel and key worker accommodation are all co-located in the Orange Health and Innovation Precinct.
Centuria owns 85 per cent of the Bloomfield Medical Centre co-located with the $54-million Bloomfield private hospital alongside Charles Sturt University’s Clinical Skills Education Centre.
“The accommodation in Orange supports the hospital’s workers, or patients’ families, and even practitioners to stay a few nights in Orange, because they may be based in Sydney,” Hemming said.
“You’re just building services, which attract and retain the right people.
“Orange services a 50,000sq m radius so people may travel quite a way for the health services.”
Hemming said while inflationary pressures were being felt across the development sector the returns and investor appetite was still prevalent in healthcare property, following the direction of the yield curve.
“But people want (to invest in) existing buildings, not development opportunities—but enquiry levels have increased significantly.
“The investment pool is not as deep as it was six years ago.”
But the opportunities for innovation are out there along with the promise of low volatility and sticky tenants in the sector.
An ageing population and a focus on preventative healthcare across all levels of government is spurring on the development pipeline.
Centuria Healthcare has four projects under construction due to be completed early next year across Queensland, NSW and Victoria.
Join us on Thursday, November 24 when Australia’s leading developers, investors and advisors working within the health property sector join us for The Urban Developer Healthcare Property vSummit.