HEALTH-CARE OPPORTUNITIES
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THE PROPERTY HANDBOOK
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its scope for growth, supported by the supply-and-demand dynamic of SA’s health-care market. With an average of 2.3 hospital beds per 1,000 people, SA lags substantially behind comparable countries. Nontraditional centres and townships are generally underserved, and there’s an emerging opportunity to develop facilities to meet this rising demand. The state’s licensing programme encourages new, smaller and empowered players in the sector. Growthpoint health-care fund’s growth pipeline has both development and acquisition projects. To help finance its early-stage growth, it partners with local and international development finance institutions, institutional investors, asset consultants and pension funds. An opportunity for broader investor participation is on the cards in coming years, with a planned IPO and stock exchange listing. Less than three years after launch, the fund is already showing growth in earnings. It delivered half-year (to end-December 2020) distribution growth per share of 7.5% to 40.8c, and is guiding similar growth for the full year to end-June 2021 — an undeniably good result in the current market. Dr Linda Sigaba, fund manager, Growthpoint Healthcare Property Holdings Growthpoint
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health-care facilities have much ntil recently, investment longer leases than, for instance, in health-care real office properties, they can withestate has been largely stand short-term economic inaccessible to South Africans. shocks. But this has changed with the While Covid-19 did not spare May 2018 launch of Growthany economic sector, including point Healthcare Property health care, where elective proHoldings, a specialised healthcedures were paused for a few care property investment fund, months during the pandemic’s which has already assembled a first wave, the fund’s hospitals R3.2bn portfolio. made a quick recovery and The fund comprises seven performance was relatively investment assets — a medical unscathed by the second wave, chamber and six hospitals — which bodes well for similar and has attracted funding from future scenarios. the likes of the International Then, there’s also our ageing Finance Corp. It plans to add population. People are living laboratories, day clinics and longer and lifestyle-related biotechnology manufacturing diseases are on the rise. This and warehousing facilities to its phenomenon is not unique to portfolio in future. The fund is the first of its Cintocare Hospital in Pretoria kind primarily because large health-care groups have traditionally owned their properties. But this is changing. More and more big names in health care are selling their buildings to unlock value for their shareholders, leaving the property ownership to specialists, while freeing up resources for health-care groups to focus on their core the US and Europe, but also operations. emerging in SA, which is adding There are several reasons it to health-care demand. makes sense for investors to There’s also an industry shift put their money in health-care to day hospitals at lower price assets. These properties are points than in-hospital day generally resilient, tend to procedures, and rising demand maintain their performance in for more specialist facilities. downturns and quickly bounce Health-care property’s back in upturns. Because resilience is surpassed only by
FINANCIAL MAIL July 2021