Equity Strategy
Healthcare A-REITS: Increasing Portfolio Health
Thu 16th September, 2021

Healthcare A-REITs have two powerful themes behind them. Firstly, the mega trend of growing healthcare expenditure, which is expected to grow at close to double GDP into the foreseeable future. Consumer appetite for improved quality of life and ageing populations underpin this trend.

Secondly, the institutional ownership of healthcare property remains low in Australia by global standards.  There is a potential shortfall of almost $A100bn of capital required to meet the property healthcare demands over the next two decades. The scale of this required capital to acquire, develop and grow property assets is increasingly likely to involve public market capital. Historically, governments funded the majority of healthcare development.

Healthcare exposed A-REITs, commonplace in the EU and US markets, are almost non-existent in Australia, representing less than 2% of the A-REIT index (yet healthcare spending is 10% of GDP). With only three healthcare exposed REITs on the ASX, all under $A1.5bn in market cap, healthcare-related A-REITs have largely remained undiscovered by institutional investors.

In this week’s report, we share our view on the compelling growth story within A-REITs and why we have added the recently listed HealthCo Healthcare and Wellness REIT (HCW) to the Wilsons Australian Equity Focus List.

  • Thematic 1: Rising healthcare expenditure
  • Thematic 2: Low levels of institutional ownership
  • HealthCo Healthcare and Wellness REIT (HCW)

About Wilsons: Wilsons is a financial advisory firm focused on delivering strategic and investment advice for people with ambition – whether they be a private investor, corporate, fund manager or global institution. Its client-first, whole of firm approach allows Wilsons to partner with clients for the long-term and provide the wide range of financial and advisory services they may require throughout their financial future. Wilsons is staff-owned and has offices across Australia.

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Written by

John Lockton , Australian Equities

John is a leading investment strategist with 20 years experience.

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