Higher living standards, healthier lifestyles and advances in medical technology have combined to significantly lengthen life expectancy in Hong Kong.
The city’s ageing population, wider insurance coverage and improved affordability of medical services is spurring demand for medical services. Hong Kong already ranks highly in several global medical rankings and is well positioned to develop a medical tourism industry, subject to having more purpose-built real estate for clinics.
Healthcare providers are expanding rapidly and displaying strong demand for commercial real estate. CBRE forecasts that medical centres will require an extra 1.0 million+ sq. ft. of commercial space in Hong Kong between now and 2022. Leasing commercial space to medical tenants offers landlords a range of advantages including rental premiums and stable occupancy.
Although numerous commercial buildings in Hong Kong are already well known as clusters for doctors and other healthcare providers, this has occurred by chance rather than by design. The number of purpose-built medical buildings remains limited despite growing demand.
This ViewPoint by CBRE Research ascertains current levels of commercial real estate demand among healthcare tenants; discusses how investors and landlords can add value to commercial buildings by positioning them as hubs for doctors and medical centres; and explains how customising commercial buildings for medical tenants requires minimal CapEx but can attract robust demand and a significant rental premium.