Healthcare real estate has one of the highest returns and lowest volatilities as a real estate investment asset class in Australia. The asset class is typically less cyclical than other real estate classes, providing attractive risk-adjusted returns for investors.
Long leases and low vacancy rates are a key attraction of healthcare real estate, providing investors with relativelysecure income compared with other real estate sectors. While average lease term for core commercial real estate sectors is circa 6 years, healthcare assets typically have 10 - 20+ year leases. Furthermore, the average vacancy rate for healthcare real estate is only circa 2%.