Government funding announcements upend healthcare and retirement living market

Colliers International helps bridge gap between aged care and healthcare groups’ operations and real estate strategies

- By Mark Agius, manager of Transaction Services for Healthcare & Retirement Living

Towards the end of 2016 and progressing into the early stages of this year, a series of announcements was made in relation to government funding and regulation for aged care and healthcare services that turned the strong healthcare and retirement living market on its head. Operators froze, scrambling to understand how the changes would affect their operating models and long-term business viability, effectively causing a flatline (or close to it) in the transactions market.

As groups sought to understand the impacts on both their operations and real estate strategy, it became clear that there was a gap in the market – a strong demand existed for sector expertise in regard to strategy, structure and capital allocation.

Colliers International’s Healthcare and Retirement Living (HRL) product line has spent the past 12 months bridging that gap for several groups by leveraging its granular understanding of operating models within the sectors, thematic trends at play, and associated real estate strategy. The team has become the trusted advisor for JewishCare Victoria, Churches of Christ Queensland, ISPT, Retire Australia and Dexus, all of which have repeatedly sought Colliers International to provide a range of ongoing services, including adhoc advice, transactions advice, due diligence, investment and development strategy derivation, and capital allocation.

Shalain Singh, head of HRL, is currently undertaking Colliers International’s annual Australian Investment Showcase. He is visiting top providers and investors in Japan and Singapore to explore key Asian healthcare themes, including care, funding and convergence from the provider perspective; in addition to capital allocation, consolidation and investment returns from the investor perspective.

The HRL team members’ work with a mix of clients, from single-site not-for-profit groups to major Australian superfunds and international sovereign funds, has positioned them as experts in the field and seen them appointed to undertake technical buy-side due diligence for an offshore sovereign fund. This work will form the basis for the team’s bid on a $1.5billion portfolio, the largest real estate-based healthcare transaction in the past decade.

Colliers International’s HRL product line covers the entire continuum of care, including allied health, medical centres, manufactured housing estates, retirement villages, aged care and hospitals, providing diverse services such as transactions (divestment and acquisition), valuations, advisory, technical due diligence, strategy derivation and capital raise.

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