SA property investors turn to ‘future-proof’ healthcare stock
Medical-grade real estate has emerged as one of the most sought-after asset classes for South Australian property investors, Colliers research has found.
Growing demand for secure, long-term investments underpinned by healthcare sector tenants has seen more than $94.6 million in medical-grade leased investments change hands over the past year, Colliers researchers have found.
Shifting investor priorities and global economic uncertainty is seeing South Australians move into the space, particularly the growing population of “active retirees”.
The average yield for medical leased investments in South Australia has compressed to 5.6 per cent in 2025 from 6.19 per cent in 2024 – reflecting the growing demand for the asset class, Colliers South Australian executive for investment services Jack Dascombe said.
“This surge in activity underscores a broader trend: investors are increasingly prioritising stability, and few sectors offer the resilience of healthcare,” Dascombe said.
The market for medical-grade is also outpacing supply, Colliers said.
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While only 3 per cent of new listings on RealCommercial in SA were classified as “medical consulting”, 11 per cent of all property searches include this category – meaning demand is 3.5 times more than supply.
The variance is driving competition and compressing yields, Colliers said.
A demographic shift, where by 2051, the number of SA residents aged over 80 is projected to increase by up to 146 per cent and the ‘active retiree’ demographic is set to grow by 30 per cent, means there is a long-term need for health infrastructure.
This means the asset class is a “future-proof investment”, Dascombe said.
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“Medical and allied-health tenants often sign long-term leases with multiple renewal options as they have a preference to remain in one location, often due to patient loyalty and specialised fit-outs,” Dascombe said.
“This makes them a highly attractive tenant for investors.”
The Colliers executive said the trend was reflected in transactional data, with 70 per cent of medical leased investments sold in Adelaide over the past year-and-a-half having a lease tail of at least five years.
“Investors are being more selective in the assets they purchase, with more groups choosing higher-grade investment opportunities,” he said.
A comparatively low cash rate, economic uncertainty and global instability is pushing capital to safer, income-producing assets.
“Interestingly, the demand for medical-grade investments is not limited to modern facilities,” Dascombe said, noting half of all medical and allied-health practitioners in the Adelaide CBD operate from character premises.
“Character properties, typically pre-1950s buildings with distinctive architectural features, are gaining popularity among healthcare operators,” Dascombe said.
“Of the character buildings sold between December 2022 and March 2025, 25 per cent were either leased to or purchased by medical professionals.”
