If you read our recent article on Parramatta Road precincts, you’ll know we identified one precinct as being suitable for medical facilities that included offices and consulting rooms, and lab or other medical facilities. However, our July leasing report identified an up-and-coming suburb for medical facilities.
Healthcare is what is known as non-discretionary; that is, people need medical specialists, general practitioners and the like. As well, the demand for aligned medical facilities such as biotech labs is growing.
Key drivers for the increased need for health care include:
There is no doubt that Australia has an ageing population. Over the last 20 years we have seen a ballooning age cohort emerge in the over 60s group now representing approximately 6 million ‒ up from 3.3 million in 2002.
In our densely populated Sydney city fringe suburbs, the demand for medical facilities can only grow as infill development increases the number of residential properties available.
As an investor in property earmarked for healthcare, you can expect strong returns and lower volatility than you get with other asset classes. Revenue streams are stable as most tenants commit to longer-term leases, especially with the current high fit-out costs. As healthcare is not a discretionary purchase, you have limited exposure to economic downturns.
The healthcare sector is one of the fastest-growing property sectors for both investors and private developers.
As part of the Parramatta Road revitalisation vision, the areas close to Sydney University and the Royal Prince Alfred teaching hospital (Camperdown precinct) are zoned for medical facilities. This area is undergoing transition and the population is expected to increase exponentially, becoming home to high-quality housing and workplaces . A new project, Camperdown Modern at 122-130 Pyrmont Bridge Road and 206 Parramatta Road Camperdown, aims to act as a catalyst and offer world-class education, health, education. The centre will enable innovators to collaborate, work and service the community.
Another precinct, although not a designated precinct, in which we’ve seen a deal of recent activity is Surry Hills, especially close to the Sydney Dental Hospital. Buildings renovated with adaptive reuse in mind offer attractive premises fit for purpose.
Australian healthcare property sector
The healthcare property sector has delivered strong returns and experienced relatively low volatility when compared to traditional real estate asset classes.
For ease of collaboration, medical facilities like offices, consulting rooms and bio-tech sit closely together. If you own a property in what is designated or identified as a medical precinct, let us help you target the right audience.
Ray White Commercial (RWC) were appointed by Barnardos Australia to lease the ground floor of 60-64 Bay Street Ultimo, for the purpose of downsizing their office footprint in the area.
As a result of a successful marketing campaign, RWC were able to secure Partnered Health as a long-term tenant for $833 per sqm ($625,000+GST) with the local area per sqm range between $600 and $700.
As dedicated local commercial real estate agents, we can help you extract more value from your commercial property. Please get in touch to discuss your circumstances and assets so that we can give you personalised advice. Whether it’s commercial leasing, management or sales, we’re here to help you with your Sydney-based commercial property.
Contact us at Ray White Commercial Sydney City Fringe