Strong operator demand drives growth in the day hospital sector

Springboard Healthcare Services, a new entity formed by a group of health and medical operators, has leased a hospital day-stay facility in Melbourne amid strong nationwide demand for medical assets.

CBRE’s Healthcare & Social Infrastructure team of Sandro Peluso, Kai Wang and Jimmy Tat steered the leasing campaign for 17 Windsor Avenue, Springvale, achieving an annual rent of $180,000 per operating theatre.

β€œExisting ready-to-go operating facilities are receiving significant interest, with the lack of market supply meaning that tenants are now putting their locational preference second on the priority list and focusing on attaining a suitable building first,” Mr Peluso said.

β€œWe are finding that, along with the rise in the cash rate to 3.85%, operators are experiencing difficulties acquiring funds to build and fit out the expensive infrastructure needed for a day hospital so are searching for existing facilities.”

Another key driver is the long elective surgery wait list across Australia. In Victoria, elective surgery patients reached 203,045 in 2022-2023. Similar trends were seen in New South Wales with the patient list reaching 144,999 in 2022-2023.

Federal and State governments have categorised items such as medicinal costs, medical research and NDIS funding as important, which is reflected through government funding and reducing costs for consumers.

Mr Wang added, β€œWith an ageing population, increased cost of living and ongoing economic uncertainty, it is encouraging to see that the Australian government has not only committed to supporting the sector but has forecast spending well into the future, again, which has led many investors to regard healthcare assets as being β€˜recession proof’.”

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