As we progress through 2024, the Australian healthcare property investment market continues to demonstrate stability and resilience, drawing the attention of seasoned investors and newcomers alike. According to the CBRE Healthcare Report 2024, the sector's appeal remains robust, with increasing investment volumes and a diversifying investor base looking to secure what can now be referred to as a “Foundational Asset” [1].
Healthcare assets, ranging from hospitals to specialised clinics, have become increasingly attractive due to their ability to withstand economic turbulence. This attractiveness is bolstered by persistent government funding commitments aimed at improving healthcare infrastructure and operations; a trend that has sharpened investor focus and prompted many to explore opportunities in this sector.
The demographic landscape also plays a pivotal role, with Australia's ageing population expected to significantly increase healthcare spending in the coming years. This demographic shift underscores the sector's investment potential, particularly over the medium-long term.
"Healthcare is now viewed as one of the most viable investment options due to life expectancy, population demographics, and increased government funding," [2] describes Kai Wang, a Leasing Executive of CBRE’s Australian Healthcare and Social Infrastructure team. This shift in perception reflects a broader recognition of healthcare's essential role in community infrastructure.
The Report also notes that the sector benefits from favourable lease terms, often featuring longer lease durations and fixed rental reviews, which can mitigate investment risks and enhance portfolio stability [3]. This stability is one factor that continues to attract investor optimism and drive demand for healthcare properties.
Looking ahead to 2024, industry experts anticipate a strong start fuelled by increasing patient volumes and renewed investor interest post-pandemic. Despite temporary setbacks such as staffing shortages and patient backlogs, proactive government policies and healthcare reforms are expected to alleviate these challenges, further supporting the sector's growth trajectory.
With solid fundamentals, demographic tailwinds, and government support, healthcare assets are poised to remain a cornerstone of diversified investment portfolios. For more detailed insights into the trends shaping the healthcare property investment market, refer to the CBRE Healthcare Report 2024, which provides a comprehensive overview of opportunities and challenges in this dynamic sector.
Disclaimer: All investment strategies and investments carry the risk of loss. This content is not intended as investment advice and does not constitute an offer or solicitation to recommend or suggest any investment product. MRDG advises seeking independent financial advice from a qualified financial adviser that considers your individual financial goals and circumstances.
[1] CBRE Healthcare Report 2024, page 4.
[2] CBRE Healthcare Report 2024, page 8.
[3] CBRE Healthcare Report 2024, page 9.
