Medical suites pulling ahead of other property bets PUBLISHED ON SEP 29, 2014 12:56 AM MEDICAL suites are proving a better investment bet than other sectors such as residential and industrial property, which are crowded with investors. A DTZ analysis has found that the medical suite segment has gradually emerged as a possibly worthwhile alternative asset class. Still, the report noted that, given the lack of clarity over the classification of medical suites, potential buyers should ensure that units marketed as such have the necessary approval for medical use, especially if they are part of a larger mixed-use development. The report found that price movements for the sector were less volatile than in the office sector, for instance, suggesting limited impact from short-term economic changes. Also, prices rose faster than in the retail sector. Prices of medical suites in the Orchard Road and Tanglin area - where 46 per cent of medical suites are found - surged 60 per cent from 2010 to last year. In comparison, resale capital values of office and retail space grew by only 15 per cent and 30 per cent respectively for the same period. With the limited supply and high demand for space at renowned and established medical centres, prices grew consistently over the years, said DTZ. In the past, private health-care groups that own hospitals sold or leased these medical suites to only doctors or dentists. But in recent years, mainstream developers have started building mixed developments with units in this field and selling them to general investors as well - though tenants must still be medical practitioners. Outside the Orchard Road and Tanglin precinct, prices of medical suites are significantly lower, DTZ noted. For example, medical centre units at Mount Elizabeth Novena were initially sold at about 20 per cent to 30 per cent lower than average prices in the Orchard Road and Tanglin area. As at the end of last year, the price gap widened. Rents were found to follow pricing trends, with rental growth the most pronounced in Orchard Road and Tanglin, where rents range from $8 to $27 per sq ft per month. Rents at Novena and Thomson have grown from $8 to $12 per sq ft per month. The estimated stock of medical suites, including hospital-supported and non-hospital-supported facilities, is about 1,520 units.Upcoming supply will come from six developments of about 335 private medical suites, which are expected to be completed from 2016 to 2018. Still, in the near term, given the demand from an expected increase in the number of practising private doctors, as well as the lack of new supply up till 2016, prices and rents of medical suites are expected to keep rising, the report said. RENNIE WHANG - See more at: straitstimes/premium/money/story/medical-suites-pulling-ahead-other-property-bets-20140929#sthash.GB6Fer6i.dpuf
Posted on: Mon, 29 Sep 2014 03:13:51 +0000
Trending Topics
Recently Viewed Topics
© 2015