The sale of a Springvale aged care facility to a Chinese investor for $13.38 million is part of a wider demand for assets within the sector from investors looking to capitalise on Victoria's ageing population, Savills Australia says. 

Comprising 2,780sqm* of floor area on a 4,347sqm* site, the 71-bed facility was sold on a 5.6 per cent yield through Savills agents Julian Heatherich, Benson Zhou and Mark Stafford.

The vendor for the property was Australian aged care services provider Japara, which has listed another two properties for sale in Melbourne.

At a glance:

• An aged care asset at 340-344 Springvale Road, Springvale has been sold to a Chinese investor for $13.38 million at a yield of 5.6 per cent.
• The vendor for the property was Australian aged care services provider Japara, which has listed another two properties for sale in Melbourne.
• The transaction was brokered by Julian Heatherich, Benson Zhou and Mark Stafford.

Mr Heatherich said unlike many other industries or uses whereby demand and levels of trade can be influenced and determined by economic conditions and external market influences such as internet retailing, aged care services are an essential need and one which is unlikely to dissipate or be undermined by online competition or similar market threats.

“According to the Australian Institute of Health and Welfare, in 2017, there were 3.8 million Australians aged 65 and over (15 per cent of the total population), by 2057 it is projected there will be 8.8 million people aged 65 and over, and 12.8 million people by 2097," he said.

“The Australian Government’s expenditure on residential aged care is expected to rise to $24 billion by 2021, representing an annual increase in excess of 5.4 per cent in the last 5 years."

Source: Savills Australia

Since 2010, there has been an increase of approximately 55 per cent in government funding for the aged care industry, and with the increased government target provisions for operational beds per 1,000 people aged 70 and over, access and expenditure in the sector is set to continue.

Savills notes there is also stable workforce participation within the sector to go along with the government support, with 25 per cent of people having worked in the industry for more than 14 years.

According to Mr Stafford, aged care facilities provided the ideal investment due to their nondiscretionary use and significant forecasted industry growth.

“The aged care industry is a non-discretionary service that is vital to the Australian community," he said.

"As the population profile in Australia continues to increase, so too does the requirement for these services, as such Government funding to the sector continues to grow."

*approximately

Similar to this: 

Healthcare sector 'an important part' of office recovery - JLL

Melbourne's The Foundry sold for $32 million

Aged care centre in Melbourne's east sold for $11.3 million