As Hong Kong and Singapore age, health businesses become bigger property players

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As the average age in Hong Kong and Singapore rises, landlords and developers need to become more in tune with the medical industry

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Cheryl Arcibal

Published: 9:30am, 3 Nov 2024

As the average age in Hong Kong and Singapore gets higher, health and beauty clinics are becoming more substantial tenants and investors in the two cities’ commercial property markets, according to real estate agents.

By 2030, around one in four Singaporeans will be aged 65 or above, up from one in 10 in 2010, according to official data. In Hong Kong, the percentage of the city’s population that is considered elderly is expected to rise to 36 per cent by 2046 from 20.5 per cent in 2021, according to the Census and Statistics Department.

This demographic change, analysts said, will require landlords and developers to become more in tune with the medical industry.

In Singapore, there are space constraints. A commercial building in the city can only have up to 20 per cent of its total gross floor area converted into medical units, limiting supply for health-related tenants, according to Savills.

Hong Kong might prove to be a better venue for an expanding health and beauty sector given its commercial property supply glut and high vacancy rates, the property consultancy said. Hong Kong developers and landlords are set to add about 3 million square feet of new office space next year, CBRE said. And the vacancy rate in the commercial property sector stood at 13.4 per cent in September, according to JLL.

“The rising investment in the medical sector within the property market isn’t necessarily a new trend,” said Yap Hui Yee, the executive director of Savills for investment sales and capital markets in Singapore. “In most cases, medical units are purchased by medical practitioners themselves rather than as traditional investment properties. This means that the demand is driven more by operational needs than by investment potential.”