As the effects of Covid-19 are being experienced across the globe, the real estate industry has been stuck heavily dependent on the severity in a particular region and type of assets. As the spread of the pandemic has not yet slowed down, its influence on healthcare has changed the complete healthcare real estate setting. With the new social distancing norms and shelter-in-place directives in place, there are new challenges to the sector and testing the industry professionals.
Changing situations due to Coronavirus:
All types of industries across the globe are facing huge challenges with the outbreak of the Coronavirus pandemic. With a successful vaccine yet to be found, COVID-19 has changed all the routine activities in the daily life of people and influencing all corners of the society. The continuation and final impact of this pandemic are not known and with the variations in the everyday situations, no industry is showing trust for huge investments. We have witnessed the different countries on lockdowns with an increase in infections and mortality rates. Even though people are adjusting to the new norms, stock markets, and global layoffs have hit the economy of the entire globe.
Impact of Covid-19 on Healthcare Real Estate:
Even with people who depend heavily on the healthcare industry in the times of Coronavirus pandemic, healthcare real estate is not safe from the impact. Different types of healthcare real estate such as hospitals, housing care centers, clinics, etc have been impacted in various ways.
- Many hospitals are facing a fiscal crisis with havocs created by the Covid-19 pandemic. There is a rush in hospitals, the requirement of new ICU facilities, scarcity of medical equipment, medicines, and following new norms. Furthermore, employees are needed to work overtime to meet the demands and mandates. They are forced to cancel some elective procedures as even the patients are avoiding visiting hospitals for non-Covid19 related medical services.
- Many hospitals are facing the inflow of finances as all the new projects are on hold. The existing projects are continuing but rural hospitals are the ones affected highly due to the impact of coronavirus outbreak. The new norms have forced all urban individuals to opt telemedicine services for speaking to doctors about their systems. Though this system is beneficial for avoiding rush at corona care centers, it has negated the inflow of patient live consultations for elective procedures. Hence there is no business as usual for hospitals leading to wait for government aid on COVID-19 treatments. Some of the standalone medical office clinics have chances of being selected for government aid as small business loans to help out during this crisis.
- Senior housings are also hit heavily by the outbreak. The majority of businesses have been kept on hold and new businesses are likely to be less certain. The operators are not able to present the assets to probable buyers which have hit the revenues in the sector.
- Fewer medical office buildings (MOB) and hospital developments are expected to break ground in the near term. Expect a focus on increasing the availability of options to treat COVID-19 patients through re-designating and converting existing spaces, reopening closed hospitals, and the construction of temporary facilities.
- The corporate activities in the healthcare sectors are expected to be hampered by the current slowness in the market. The variations in the economy have probable chances to alter the current rankings and plans of private healthcare facilities. But all the dependent actions in the industry are highly reliant on the changes in the spread of the pandemic.
- Due to the constant spread of Coronavirus, situations for healthcare settings especially for senior citizens have been changing drastically. People are opting for home healthcare facilities instead of hospitals and in the coming days, these situations will rely on the spread of Covid-19.
Future trends in the healthcare sector:
- Telemedicine will be an integral part of the overall healthcare setup causing only a smaller number of physical systems to exist.
- Shift to highly flexible healthcare spaces that provide the option to have easy changeover with variations in requirements.
- Enhancement inflexible essential healthcare equipment and devices that could be easily portable or transformed when needed.
- Increase in monetizing of extra non-essential properties in the sector.
Positive aspects of healthcare real estate:
As there will be changes in the overall healthcare service there will be variations in the physical properties of these hospitals and practices. Major needs would be focussed on restricting the number of surfaces people will touch, enhancing the ease of access to hand-sanitization stations, following social distancing at all places in the buildings, controlling the flow of traffic, and promoting mobile registrations. All these measures will have an impact on the upcoming structures that will allow the smooth functioning of the segment.
Some of the elective surgeries have been postponed due to unavoidable situations and have affected the regular services. But, steadily, elective surgeries are set to start and the lists have to be managed by the hospitals. Whether the resulting implications are highly reliant on the spread of the virus and if any changes in outbreak patterns.
In the coming days, medical office buildings have all the potential to be an ideal investment since the healthcare industry is foremost in the requirement of new conveniences. There will be shifting away from the traditional healthcare spaces and reconfiguration of the system to have sufficient outpatient facilities. Hence, healthcare real estate may see a transformation but the industry will offer plenty of opportunities than other real estate sectors.
There is an impact of the Covid-19 pandemic on Healthcare real estate due to variations in approach and changes in the mindset of individuals. But as mentioned above, having a huge opportunity to modernize, investors will find healthcare as a safe investment option when compared to other types of assets. Your long-term success is reliant on associating with a leading healthcare real estate advisor such as Zeustra who focuses on property investments across the entire healthcare industry.