Healthcare boom could drive coronavirus office recovery
Property experts are tipping the expected “explosion” of growth in the healthcare system to fuel demand for office space in Australia’s post-pandemic market.
Investment in medical research, better aged care, high-quality care, pharmaceuticals and social services for mental health are all on the cards, and JLL’s NSW Head of Office Leasing, Dan Kernaghan, says the trend will drive the recovery of office leasing markets.
“Healthcare was already a growing sector of the economy and we anticipate the expansion in healthcare related activities will accelerate in 2021 and over the medium term,” he says.
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“JLL research figures show from the first quarter of 2020 show healthcare and social assistance made up 73,155sqm of Australia’s gross leasing volume by sector over the previous three-year period.
“We expect that to increase going forward, especially with Australia’s ageing population and the need to increase spend on healthcare as a result.”
Areas like Westmead and Macquarie Park, which already have a strong healthcare and university presence, are flagged as future growth hotspots with existing tenants expected to expand their footprint.
Perth and Melbourne are also likely to benefit with strong healthcare assets, along with other major regional centres across Australia.
The forecast growth comes after grow nationally in the health sector has lagged behind other countries in recent years, unlike the US where the industry boomed and contributed to office leasing activity.
But Kernaghan says this puts Australia in a strong position for growth moving forward.
Health is also proving not to be the only industry promising opportunity for property owners and investors.
A range of green shoot sectors are emerging as COVID-19 restrictions ease, including property technology, e-commerce, the digital economy and home entertainment areas.
New jobs in these industries will likely see benefits flow on to the office sector, as well as increase space needed in industrial property, JLL says.
