Expanding your medical practice: Opportunities for growth
For medical specialists seeking to expand their practices in Perth, location is key and can be the difference between lucrative growth or a financial black hole. So which Perth suburbs should medical practitioners be targeting?
When considering expanding a medical practice, there are a number of ‘big picture’ locational factors to consider.
The current spatial framework and development blueprint for Perth – Directions 2031 – sets out a plan and hierarchy for primary and secondary activity centres so that they may grow and develop as community focal points.
These centres feature higher-density housing and commercial precincts to comprise retail, entertainment, civic/community, higher education and medical services.
Activity centres vary in size and diversity and some present better opportunities than others for medical practitioners – population growth, demographic shifts and public and private investment will have significant influences on these areas, for example.
Perth’s key activity centres
Second only to the Perth CBD on the activity centre hierarchy, primary centres are large urban nodes that are intended to provide entire regions with a full range of economic and community services.
The Western Australian state government places important focus on the connectivity of these centres, with passenger rail and or high frequency bus transport considered essential to their operation in the long term.
Directions 2031 outlines Cannington, Fremantle, Morley and Stirling as the four primary metropolitan centres for the Perth central sub-region.
Due to major visitor drawcards, such as department stores, supermarkets, major offices and state government agencies, medical spaces in and around these centres present good opportunities for medical practitioners looking for high rent returns and strong capital growth.
Specialised centres are a slightly different hub to typical activity centres as each has a strong specialised role based on a major institution within the centre.
Directions 2031 identifies the major specialised centres of Perth as Murdoch, UWA/QEII, Bentley/Curtin and the Perth Airport.
Both Murdoch and UWA/QEII are focussed on delivering high-quality education and health services, Bentley/Curtin provides education and technology while the airport’s primary function is aviation and logistics.
Murdoch and UWA/QEII present opportunities for the development of complementary medical activities nearby and allow for benefits from agglomeration to be gained, however medical practitioners should be cautious of these centres as competition is high and many strong medical practices are already well established here.
Sitting beneath primary centres are the slightly smaller secondary centres, which are generally dominated by retail but can also include office, housing, community services and recreational activities.
They share similar characteristics with primary centres but serve smaller catchments and offer a more limited range of services.
Directions 2031 outlines Belmont, Booragoon, Claremont, Karrinyup, Leederville, Mirrabooka, Subiaco and Victoria Park as the central sub-region secondary centres.
These centres play an important role in the wider economy and provide residents within their catchment with essential goods and services.
Medical spaces within these centres are common and present an excellent prospect for specialists.
They are designed to service up to 150,000 persons, enough to provide steady demand for health care needs, and property within or around these centres is generally more affordable than the higher profile primary centres.
At the bottom of the hierarchy, servicing the daily and weekly needs of residents are district centres and neighbourhood centres.
Their smaller scale means they have a greater local community focus and can provide the immediate residents with services that reflect the particular needs of their catchments.
Hubs such as Dog Swamp, South Perth, Kardinya, Jolimont and Noranda are all examples included in the long list of district centres identified in Directions 2031.
Medical specialists can uncover opportunities in these centres by targeting specific suburbs with demographics that require frequent medical needs.
For example, certain health services might succeed in a district centre with a catchment that includes a high proportion of aged residents as this demographic hold a strong and steady demand for health care.
Population growth and favourable demographic shifts
The population of Greater Perth has grown rapidly since the turn of the millennium and despite a recent dip in growth rates, the region remains on track to hit 3.5 million residents by the year 2050 as pre-empted by the state government.
Not only is the population growing, it is ageing and this shift in demographic will become increasingly pronounced in the years to come.
The latest census data shows that the biggest proportion of over 65s are residing in areas within the western suburbs as well as Fremantle and its surrounds.
It is this information that medical specialists should consider as they select locations that will facilitate strong demand and therefore have the best chance of receiving high rent returns and strong capital growth.
As outlined in Directions 2031, areas earmarked as major activity centres will be the target of increased residential density and with the popularity of mixed-use developments increasing, new spaces and opportunities are becoming available.
Medical suites and pharmacies are commonly proposed tenancies for such mixed-use developments. Taking advantage of such initiatives, which create greater amenity and act as major drawcards for local residents, present good opportunities for medical practitioners.
What’s more, investment opportunities aren’t solely limited to these new developments as the surrounding streets or nearby commercial precincts may also benefit and provide favourable opportunities as such areas are transformed.
Thorough research, analysis and feasibilities are needed, however, to ensure any medical spaces in these areas perform as expected.
There are also site-specific demand factors that medical specialists need to consider, such as parking, exposure, accessibility and location of competitors and referral partners, for example, that need to be taken into account to help ensure the success of any expansion.
This article is an extract from Momentum Wealth’s Perth Medical Property Report. For more information on what medical specialists need to know when expanding their practices, click here to download your free copy of the report.