[+] Medical Pivots to Meet Demands of Next-Gen Doctors

It’s not about attracting patients, it’s about attracting young doctors and dream tenants, according to developers within the healthcare sector. This market is shifting from its cold, unfriendly and outdated foundations for the next generation. Once a quiet achiever, the pandemic brought this alternate asset into the spotlight—now there are state-of-the-art hospitals emerging around the country and the public sector is not the only winner. HMC Capital’s $1.2-billion-plus acquisition of a healthcare portfolio including mental-health and acute care facilities was one of the biggest transactions of 2023. This level of competition and sheer volume of new properties reaching completion is ushering in a new level of care and amenity to the sector. For private investors and high-net-worth individuals, healthcare assets are the second highest on their wish lists, according to Knight Frank’s wealth report, trailing living sectors by just 1 per cent. The only issue is “intentions do not necessarily equate to transactions due to factors including availability of stock, market size and competition”, so developers are steping in, creating new partnerships. ▲ This Avive Health hospital at Windsor is the seventh dedicated mental health facility to be added to the Barwon Institutional Healthcare Property Fund. For example, Barwon Investment Partners developed and opened a 63-bed private hospital in collaboration with private mental health provider Avive Health at Windor in Brisbane’s inner north. Barwon Investment Partners head of healthcare property Tom Patrick says it is just one of many to come with plans to invest $1 billion in Queensland in the next five years. “The healthcare segment is absolutely a growing sector of our economy,” Patrick says. “It’s about 12 per cent of our GDP and we’re spending $240 billion a year in Australia on healthcare, so why wouldn’t you invest in real estate that supports that. “By nature of the health economy and preferences for institutional capital to be in the sector, that will be the main driver of healthcare real estate in the next five years.” Patrick says the competition is not necessarily to attract patients, it’s to attract doctors. “That’s the greatest risk—to attract practitioners, I need a certain quality of finish and amenity within the facility that’s going to attract doctors,” Patrick says. “If you built a hospital in the 1990s ... people will say ‘What’s that?’ Now, I won’t invest in anything that doesn’t have end-of-trip facilities for the doctors.” The facilities are new, the doctors are younger and this, combined with new technology, is also providing better care for patients. Patrick says there is a real shift in the way clinical services are provided. “What we’re trying to do as an industry is move away from the institutional feel of the old mental health hospitals and more towards an environment where people feel they can recover,” Patrick says. “So this is a lovely light filled space that has views out onto the green hills of Brisbane. “There’s other amenities that you would ordinarily expect in your life—gymnasiums, cafes, breakout rooms—which are absent from many of today’s hospitals. “There’s also a heavy introduction of technologies.” This includes wearables to monitor vital statistics as well as for inpatients to adjust the lighting and mood of rooms, and for outpatients’ continued care and to monitor their health. ▲ MAAD Developments’ Mansour Habchi and Angela Sclavos have several high-end developments across Brisbane in the commercial and residential space. MAAD Group has thos year opened a high-end radiology facility in Fortitude Valley, another result of a developer-practice partnership. MAAD Group director Mansour Habchi says with current construction costs it made sense to go smaller and partner with the practitioners. “We were literally about to lease a building on the street. Then we got this building presented to us—the day before I signed—and it was up for sale,” Habchi says. “It was a great piece of land with dual develoment applications and I guess it was not stacking up for other developers to go up. For us [it made sense] to keep it as it is and modify it as a medical center.” Instead of taking on the previous approval for a nine-storey commercial tower, MAAD created a specialist medical facility with an “aggressive facade” including 40,000 LED lights. The inspiration is taking the atmosphere created in other hospitality fitouts—including those around Essa and The Green in James Street—to get rid of the “cold clinical feel”. “It is a boutique, high-end medical with a high-end finish without the high-end price,” Habchi says. “We wanted to give that hotel feel, so people can feel comfortable and safe, like they’re in good hands.” Delete Ultimately developing in this space is about getting something every property owner wants. “It’s a good industry to be in, there’s a good appetite, long secure leases,” Habchi says. “They spend quite a bit of money on their fitouts, machinery and that sort of thing and they’re long-term tenants. “As a developer, they’re your dream.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Medical Pivots to Meet Demands of Next-Gen Doctors

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