Healthcare has a spring in its step

THE AUSTRALASIAN healthcare property sector is on a growth trajectory as the population ages.

Investors are latching on to demand for healthcare property created by a growing and ageing population.

Exposure to this demographic driver can come through private hospitals, medical centres and aged-care facilities.

‘‘The healthcare sector is a growth industry,’’ Zenith Investment Partners senior analyst Dugald Higgins said. ‘‘Much is underpinned by population growth, rising household income and the implications of having an ageing population. We are really on the leading edge of the wave of baby boomers retiring. That obviously changes the age composition. This has a big leading effect on hospital intakes.’’

The emerging sector, and its prospects, have grown to such an extent that property research company IPD, in conjunction with the Property Council of Australia, recently launched an index for it. So far it tracks 49 healthcare assets worth about A$1 billion (NZ$1.25b).

There are five main fund managers in the index: Arena; Australian Unity; the listed periods. Significantly, medical centres and hospitals held up much better than property overall in the downturn.

Higgins says healthcare property is strongly defensive, although some funds may not capture as much upside as some property investments in a rising market.

‘‘Because it is a sector which is underpinned by population growth Generation Healthcare REIT; Heathfield; and Vital Healthcare Property, listed on the New Zealand board, which took over an Arena-listed fund two years ago.

The latest IPD/PCA snapshot, from the June 2012 quarter, makes a clear case for the sector, which has outperformed overall commercial property in total return over one, three and five-year