Healthcare exposure without the crowds

Investor demand for healthcare stocks has grown from already high levels in 2020 but an emerging asset class provides a less crowded entry point, says David Burgess of Elanor Investors Group (ASX: ENN).

He notes core differences in the ownership structure of healthcare properties in Australia versus the US as a key part of the opportunity. “It’s a very fragmented market, with a large proportion of it not in institutional hands – which distinguishes it from other markets like the US where healthcare sits alongside office, industrial and retail,” says Burgess.

In Australia, he argues healthcare property is emerging as an asset class in its own right – underpinned by solid fundamentals including:

• Strong cashflows
• Strong risk-adjusted returns
• Low volatility
• Strong macro demand.

Burgess tips an annual 15% internal rate of return for investors “and we expect that to be delivered quite comfortably, given there’s growing institutional demand for this sector.” 

In the following video, he discusses Elanor’s active investment approach to listed property and outlines the opportunity for Australian investors.