Aged Care A Healthy Place To Invest
Sydney Morning Herald
Saturday July 22, 2000
The health-care sector is considered one of the most dynamic for the property industry because accommodation and hospitals will become more important as the population lives longer.
Demand for aged-care homes, nursing homes, private hospitals and retirement homes and villages is rising.
Already companies such as Development Capital of Australia (DCA) are making in-roads into the industry.
DCA recently announced it had spent $12 million on two new sites in Canberra and Melbourne, boosting its assets to eight residential centres with 623 beds.
It is starting a five-year program to boost its aged-care portfolio to more than $250 million.
DCA has lending in place to fund purchases up to $60 million, of which $38 million has already been committed.
The company's managing director, David Vaux, said he expected the group would have used up its current funding within the next nine months.
That might lead to a raising of private funds.
But as more construction deals are signed, the management of the projects becomes critical.
In the construction sector, project management bares the weight of responsibility.
One company that is heavily involved in the sector is the Incoll Group, through its recent acquisition of RGA Pty Ltd.
Greg Incoll, the group's chief executive, said: ``Health is a constant and the demand for facility refurbishment and development is unlikely to wane.
``The rapidity of change in the health-care sector demands a construction industry that can remain flexible and stay ahead of the game.
``Bob Carr's recent announcement that NSW would benefit from a capital injection of $2billion over the next three years is a clear indication of the importance of the issue in the political arena."
The new managing director of Incoll RGA, Richard Nixon, said: ``As the economy gets healthier, so the health sector makes more demand on the economy.
`` There's little doubt that the role of the specialist project-management team in such instances is an absolute if the health-care sector is to deliver services that satisfy public demand and patient need.
``In a political environment that has created a policy for a model of care, the inclusion of specialist project-management teams is a given."
Nixon said that the ever-changing nature of the hospital environment meant the project team had to account for upturns and downturns in space and facility requirements. Flexibility was the key.
`` The project-management team has to understand the ebb and flow of the hospital environment and be extremely competent in rationalising the decision once agreed," he said.
``It is in such a situation that the hospital planner is so invaluable."
In the past month, Incoll Group has won two significant health-care projects at Nowra and Wollongong, which involve the spending of $100 million.
Incoll said both were public hospitals and beneficiaries of increased government expenditure.
``Incoll's role in both projects is to provide a full project management service, including design management, contract procurement and construction supervision," he said.
``The primary function, however, is to ensure redevelopment and refurbishment has zero impact on the well-being of patients by allowing the hospital to remain fully functional throughout the construction process.
``Achieving this while managing the impact of restricted site access, noise limitations, demolition and often hazardous materials means that health-care projects are where the project management team faces its greatest challenge."
Nixon said the evolution of the private health-care sector continued to provide increased revenue opportunities for the right project management team. The trend was likely to remain for the foreseeable future.
``The emergence of the affluent older generation has catalysed the migration of the population to areas more conducive to relaxation," Nixon said.
``Couple this with an increased public awareness of patient rights and the indications are that specific national regions will require state-of-the-art patient-care facilities for many years to come.
``Incoll Group will continue to support this area of market development through the provision of specialist project management services across Australia."
The speed of medical evolution would affect the construction sector, he said. Tighter fiscal measures, an increasing need for flexible working environments and more demanding patients meant the industry would have to change the way it operated.
© 2000 Sydney Morning Herald
