WA MARKET OVERVIEW
JAMES BAKER Director, Investment Services
WESTERN AUSTRALIA
James Baker, Richard Cash, Sarah Krahner, Yashwini Halai, Aidan Austen - Colliers WA
Thank-you for the opportunity to share your insights as part of The Property Development Review publication - what are the key trends occurring across alternative asset classes (healthcare, student accommodation) so far in 2024. The market for alternative real estate assets is increasingly broad, professionalised and offers interesting opportunities. Colliers in-depth knowledge of alternative markets and their products, as well as sources of capital, allows us to design and execute the best business strategies tailored to each investor. To highlight just a few in Western Australia, lets dive into healthcare, Service Stations, Student Accommodation and Quick Service Retail. Healthcare The need for healthcare and medical centres has evolved as a result of the COVID-19 pandemic but also from other factors in Australia such as; an ageing population, increasing prevalence of chronic diseases and increased awareness of health and well-being. The public are now more in-tune and responsive in healthcare scenarios more than ever. Western Australia’s healthcare sector has experienced steady growth, fueled by increasing demand for medical services. The state’s population surge, which outpaces the nation, has driven interest in Medical Centres and Healthcare Assets, resulting in the sale of numerous centres during H1 2024. Colliers Director of Investment Services in Western Australia, James Baker said “with the changing market conditions in 2023, we saw transaction volumes reduced as Buyers and Sellers adjusted to rising interest rates. However, the first half of 2024 has seen a number of Medical Centre transactions and we expect for this trend to continue for the remainder of the year.” Childcare Whilst several factors have affected the industry in
recent years including COVID 19, staff shortages, government regulations and inflationary pressures, the childcare market has been highly desirable “by a range of investors including high net worths and A REITS. The Childcare industry in WA has grown significantly over the past few years and with a total population of 169,500 children under the age of four in the year to December 2023, the need for childcare is evident. The State had the largest proportion of children under the age of four at 5.8%. Colliers Research Manager, Yashwini Halai said “Demand for childcare facilities is likely to heighten as population for the age cohort in WA is forecast to increase by 9% between 2023-2031 as per SAFI forecasts. Many childcare operators are looking to acquire suitable sites to develop new centres to accommodate demand. Childcare centre catchments are typically within 5km of homes, places of work or schools. With the growing labour force participation as both parents going into the workforce, a key driver to childcare development is the ease of which parents can drop off and pick up children before and after work.” Colliers State Chief Executive for Western Australia, Richard Cash said “Modern Childcare Centre’s continue to draw interest from a wide pool of investor types, providing an attractive investment option for both Institutional and Private buyers due to key attributes including long WALE secure leases, annual rental growth, attractive depreciation benefits, Government subsidies provided, industry support as well as properties being strategically placed on well-located sites.” Ms Halai Said “The increasing cost of living pressures is often requiring both parents to be in fulltime work or working longer hours which has resulted in children being in childcare facilities for longer hours.” Service stations & Quick Service Retail The service station sector, which has traditionally provided the fuel to power internal combustion
RICHARD CASH State Chief Executive Western Australia
SARAH KRAHNER Valuer
YASHWINI HALAI Manager, Research
AIDAN AUSTEN Executive, Investment Services
86 – July / August 2024
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