Author: Ross Elliott – Senior Business Advisor
In the September edition of E-News, we touched on the potential for significant jobs growth in the health and social services sector to drive property opportunities in the future. This month, we can reveal how this fast emerging growth industry of the future is already responsible for roughly $4 billion in proposed new and expanded facilities in South East Queensland alone. If this is a sign of things to come, property development as we know it may begin to shift its focus from traditional anchors such as supermarkets for retail and increasingly turn its attention to health businesses as anchor tenants for new or redeveloped centres.
Health and social services, however you look at it, whatever geographic area you choose to focus on, and almost whatever foreseeable timeframe you choose to think about, is going to be the biggest growth industry in Australia. The array of consensus forecasts on this is so compelling that this is an easy statement to make with confidence. In South East Queensland alone, a study earlier this year by Macroplan for The Suburban Alliance revealed that the industry is going to add a predicted 220,000 jobs to the market by 2041 – which is roughly double what education and training is predicted to add. By this time, it will employ twice the number of people employed in the retail industry, and twice as many as those employed in the tourism sector.
We are currently investigating how that predicted job growth will translate into demand for physical premises, and what sort of property opportunities and planning challenges this will create.
We can distil the predicted forecast jobs down into a variety of occupations and make assumptions about their typical space requirements. As an example, a GP’s practice, has certain floor space characteristics and related property needs such as car parking. But what happens when the GP combines with the pharmacy, the pathology lab, a physiotherapist, the ophthalmologist, the ENT specialist and a day surgery?
We are already starting to see this. A quick check on the data shows there are roughly 36 medical centres on the drawing boards in South East Queensland with a combined value of around $153 million, ranging in size from facilities of less than 500 square metres to projects over 10,000 square metres. There are also a significant number of new hospitals and a range of extensive hospital refurbishments and expansions.
The days of stand-alone medical practices operating as single tenancies in high streets or neighborhood retail centres are possibly giving way to clustered medical services operating from larger premises which have been purpose designed around their needs. Where these larger centres will go will reflect town planning policies and investment appetite: the former to permit or encourage consolidation of health and medical uses; the latter to come up with the development solution.
Will shopping centres experiencing a structural downturn in trade (thanks to changing trade area demographics and the shifting sands of consumer behaviour) be better redeveloped as integrated medical centres, supported by limited retail? Or will the realities of development economics mean the rents needed for this to work can’t be achieved, leading to ongoing fragmentation of future properties for the health services sector? What alternative sites might be found for integrated medical centres and what opportunities are there to integrate medical related businesses into mixed use developments?
At this stage, we don’t know the answers to these questions but the sheer weight of jobs that will emerge in the sector is certain to drive a range of new development responses. The list of occupations involved reads like a tenancy board of opportunity: there’s residential care, child care and other related care services; there is pathology and diagnostic imaging; there are mainstream medical and hospital services and then there are the legions of allied health professionals from audiologists to clinical lab scientists to dental hygienists to dieticians and nutritionists. There are the psychologists and physiologists; there are radiation assistants and occupational therapists; optometrists, orthotics and prosthetics professionals, paramedics, phlebotomists, physical therapists, physiotherapists, renal technologists, speech therapists, and many many more.
And they all need workplaces, which means floorspace. The question is how much, and where. The answer will be a valuable roadmap to future opportunities.
Macroplan has a client currently looking for other interested parties to partner with on a major investigation into the property and economic development impacts of growth in the health services sector, beginning with South East Queensland. This will offer clients a low cost way to access a highly detailed report into market opportunity associated with this sector. For a copy of the proposal to see if this is of interest, please contact Ross Elliott in our Brisbane office on Elliott@macroplan.com.au or call 07 3221 8166.