Healthcare sector flying high amidst COVID chaos

One sector that has continued to maintain investor interest during the pandemic has been the healthcare sector, but why?

As certain commercial markets including the office sector remain unstable, Australia’s healthcare sector has seen ongoing domestic and overseas investment.

The country’s ageing population means government investment, both public and privately, will investors appeal, with the Australian Bureau of Statistics predicting a 19.5% increase in the number of Australians over the age of 70 by 2022.

So for investors playing the long game, healthcare is serious appealing.

You only have to look at the recent investment moves made by property giants Dexus, who, at the end of October, acquired a healthcare asset in Adelaide for $446 million, whilst last week sold a 50% share in Sydney’s Grosvenor Place for $925 million.

Dexus acquired the Bragg Centre in Adelaide for $446m in October

Another reason why investors are snapping up healthcare assets is because of people’s growing appreciation for the importance of their health.

At a time when some industries have been forced to completely close, the same cannot be said for healthcare.

And as social distancing measures are eased, healthcare businesses that have had to pause operations will be amongst the first to open their doors once more.

Because personal healthcare is something that can be put on hold temporarily, but never avoided entirely, and so, the healthcare sector will continue to perform well.

Take a look at the previous economic meltdown – the Global Financial Crisis back in 2007 – the healthcare sector led the way then, and it is looking like it will continue to do so in this current COVID-era.

Credit: CBRE Healthcare and Social Infrastructure Research

Australian healthcare assets also tend to have longer lease terms or WALE than the other traditional property sectors, offering less investment risk and greater flexibility for diversification – music to the ears of savvy investors.

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