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Asian interest in Australian HRL markets continues to grow

Colliers International’s Health and Retirement Living team engages with operators, funds and government officials during recent tour of Asia

Mergers and acquisitions with various Asian aged care and retirement facilities are expected to increase in 2017 and beyond, according to Colliers International feedback following a recent tour of Asia.

Head of Healthcare and Retirement Living for Colliers International, Shalain Singh, toured select countries throughout Asia from October 25 to November 2. His agenda was to compare and contrast the operation and funding methods of aged care properties in Australia and Asia, as well as gauge Asian interest in investing in the Australian healthcare model.

Mr Singh engaged with a total of 106 operators, funds and government officials throughout China, Korea and Japan during the tour.

“Interest in the Australian healthcare sector is growing rapidly, with the intention of both direct and indirect investment from offshore in addition to local funds,” he said.

“Against this backdrop, we anticipate mergers and acquisitions together, with strategic reviews to increase markedly in 2017."

Following Colliers International’s Australian Investment Showcase in Shanghai, Mr Singh flew to Seoul in South Korea, where he presented to private equity funds and healthcare owners and ministers.

On October 28, he then flew to Tokyo, Japan, where he presented again to various funds and held a meeting with two health ministers. Whilst there, he was invited to take a site tour of a retirement village.

Mr Singh said the outcome of the trip was overwhelmingly positive, based on the Australian healthcare sector’s current state of growth, which was expected to continue into the future.

“The Australian healthcare sector is being fuelled by strong demand demographics from an ageing population and deregulation of various services like home and community care,” he said.

“In particular, there is a merging of care provision across hospitals, retirement villages and aged care facilities."

Mr Singh said these trends were driving development and consolidation in aged care and retirement villages, with increasing activity levels.

“There are new entrants to the market, such as institutional funds, that are driving competition and the price for quality, well-located assets – be they going-concern businesses or development sites,” he said.

"Consequently, we are witnessing higher transaction volumes, as well as a desire for strategic advice in light of the changes that have occurred recently and proposed to occur next year."

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