The Melbourne market for medical assets is seeing strong demand from investors, with two medical properties being snapped up by investors for a total of over $7 million. 

Both properties were marketed by RWC Glen Waverley director Ryan Trickey and sales and leasing agent Will Jonas.

The first property is located at 1078 Main Road, Eltham, Victoria. The 1,900sqm site comprises a net lettable area of 500sqm and is currently tenanted by Nillumbik Medical Centre. 

“This is a significant medical precinct which has spent decades as the community's biggest and most visited medical centre,” Mr Trickey said. 

“The established tenant operates from a high quality, modern facility which underwent a detailed renovation in 2013.

“The property is well-positioned for continued growth and success as a local healthcare market leader.” 

When talking about buyer profile Mr Jonas said: “It sold to an investor for over $5 million as it’s a clear way to market here given it’s got a long lease and has been operational for some 40 years.”

The second property is located at 32-34 Riddell Road, Wantirna South. With a site area of 2,090sqm and a building area of 370sqm, the property was offered for sale as vacant possession. Mr Trickey said it sold for $2 million. 

“This property had been successfully running as a medical centre for over 30 years, yet its versatile nature provided numerous exit strategies, which offered buyers the flexibility to pivot their business direction if they chose to,” Mr Trickey said. 

“It’s very hard to find an investment and development opportunity like this amongst a thriving residential community.

“The property sold to an investor who is working with us to ascertain an investment strategy beyond the vacant possession status.” 

Mr Trickey said medical assets had continued to perform well in the post-covid environment. 

“Medical is proving to be one of, if not the most, resilient asset class given the type of buyer and tenant that these opportunities attract,” he said. 

“We are seeing some external pressure on secondary and tertiary retail spaces with short leases being secured, which is negatively impacting cap rates/asset value.

“Medical is bucking this trend, and we are seeing longer leases and greater levels of commitment from occupiers. As a result, they are fairly stable opportunities.” 

He said medical assets were in demand for a number of reasons. 

“These sites often have well-positioned land and profiles. Corner sites or large street frontages means the underpinning land is some of the best in its precinct,” Mr Trickey said. 

“The cost to build medical facilities is becoming larger. With the compliance and build cost that's specific to medical, existing centres are good value by comparison. 

“Medical assets often attract longer leases, and tenants don't really want to move once they are established, which is good for all stakeholders.” 

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