Understanding Health Property Demand in an Era of Uncertainty

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We provide clarity to support health property assets of all scales – from re-mixing shopping centre space, to bespoke health properties, to fully integrated health and knowledge precincts

David Wilcox View Profile

Urbis’ health sector advisory service provides clarity through all stages of the property lifecycle to identify tenant mixes that can support health property asserts of all scales – from re-mixing shopping centre space, to bespoke health properties to fully integrated health and knowledge precincts. Our heath workforce planning and community health needs analysis can assist in understanding both supply and demand market conditions.

Consistent themes emerge in each instance relating to:

• Market growth – the scale of population growth and key demographics, health needs and ability to pay for private health cover within the catchment
• Understanding current health provision – including the current and future supply / demand balance for a range of medical and allied health uses
• Competitive positioning – what unique attributes can the site / development leverage to make it a compelling location, not just for new health operators, but as a potential relocation play for existing operators in the market
• Specialisation – what is the role of the precinct in a regional / national context, what research specialisms exist and how can they drive further demand in supply chains and value-adding sectors
• Complementary uses – are there compelling opportunities for non-core health uses to be integrated within the development, for example medi-hotel, key worker accommodation, administrative space, retail and recreational uses
• Optimisation – based on all of the above, what is the optimal approach to tenanting health property and what are the risks and opportunities within the market

The following examples illustrate how our health sector team identifies successful strategies for health assets across a diverse spectrum.

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We have provided market advice on several of the largest Health Innovation precincts in Australia including Westmead, Boggo Road and Parkville. 

Health and Innovation Precinct Development

Urbis has provided market advice on several of the largest Health Innovation precincts in Australia including Westmead, Boggo Road and Parkville.  Quantifying the demand for commercial space in these precincts requires a broader view of the strategic role and place proposition in a city-wide and health eco-system context.  Our approach typically includes:

• Place amenity – how does the precinct score against key place metrics compared to its competitors
• Value proposition – how does the quality of the place, the strength of its anchors and its growth potential align to make the precinct attractive to tenants and knowledge workers
• Maturity pathway – linked to the above how advanced is the precinct as an innovation precinct and what are they critical gaps that need to be filled to help it to evolve
• Ecosystem role – critical to understanding ‘where to play’ and ‘where not to play’ is understanding how the precincts specialisations work and complement others at a city / region level
• Enablers for success – who are they key partners and what governance levers do they have to influence success. What are the key barriers that pose a risk to success
• Synergistic land use demand – rather than considering land use demand in isolation, we consider and quantify the spin-off benefits between them to the precinct and its neighbours
• Economic and social benefits – how can the quantification of benefits from the development be aligned to build a compelling case for investment

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The opportunity exists for health to step in – a relationship which is mutually beneficial.

The Urbis Shopping Centre Benchmarks 2023 report shows the proportion of centres with a Medical/Professional Service offering has grown from 68% in 2015 to 77% in 2023, largely driven by medical and allied health tenants.

Our analysis shows that centres with 3 or more medial and allied health tenants (often a medical hub offering) average over double the retail sales versus centres without a medical/allied health offering.

With some retailers downsizing physical shops, and department stores taking up less space – the opportunity exists for health to step in – a relationship which is mutually beneficial.

As a more destinational use with less reliance on foot traffic, health and wellbeing uses can work well in spaces that may otherwise be challenging for retailers. Health providers benefit from the convenient accessibility, including car park provision, that shopping centres offer.

Our team can provide high level analysis or a deep dive into community health needs to determine the optimal health and wellness mix and positioning at shopping centres and mixed use precincts.