While the property market as a whole is predicted to experience modest growth this year, healthcare property is expected to lead the market with standout growth, according to an industry expert.
Martin Hession, head of property at Australian Unity Investments (AUI), said demand for the healthcare property was already increasing – with offshore investors seeking to acquire whole portfolios of healthcare properties.
He said increased competition would push up property values, while a tightening of capitalisation rates will also increase capital values.
“This provides managers with the opportunity to expand and refurbish properties, which should lead to increased rental returns and allow more favourable tenancy terms to be established,” he said.
Hession also cited an increasing demand for healthcare properties from providers, as well as the need for healthcare services for an ageing Australian society, as factors that will guarantee occupancy levels.
Hession said AUI is planning to invest a total of up to $40 million in three private hospitals in its Healthcare Property Trust this year.
