The Growing Influence of Health Services in Hong Kong and Singapore Properties

The Rising Importance of Health Sector in Property Markets

As Hong Kong and Singapore age, the health businesses have emerged as notable influences in their respective property markets. With growing older populations, health and beauty clinics are gaining traction as substantial tenants. By 2030, one in four Singaporeans is projected to be aged 65 or above, while Hong Kong's elderly population is expected to rise to 36 percent by 2046.

Singapore’s Tightened Medical Space

In Singapore, real estate constraints hinder the conversion of commercial buildings into medical units. Currently, only 20 percent of total floor area is permitted for such uses. Savills indicates that, notwithstanding these restrictions, medical investments are gaining ground.

Hong Kong's Versatile Space Availability

Conversely, Hong Kong’s commercial property market is witnessing a supply glut, making it conducive for health and beauty sectors to flourish. CBRE forecasts 3 million square feet of new office space to be introduced next year, coupled with a 13.4 percent vacancy rate as of September.

• Yap Hui Yee from Savills highlights that medical units are primarily acquired by practitioners for operational needs, driving demand.
• Noteworthy transactions include Parkway Hospitals' S$31.33 million purchase in Singapore's Tong Building.
• Moreover, Hong Kong Baptist Hospital's retail space acquisition reflects growing interest in medical real estate.

Investment Trends in Hospitality Sector

Industry giants like Swire Pacific are also investing heavily in healthcare, demonstrating the increasing significance of this sector. With a commitment of HK$20 billion, Swire views this demographic trend as a long-term growth opportunity.

For landlords looking to maximize their investments, understanding the foundational needs of the medical segment will be crucial. Future developments must provide high floor load capabilities and enhance accessibility features.