Different real estate for different care?

Investor market 'out of infancy'

The healthcare real estate market is in flux. Investors are stirring in more categories and institutions are looking for ways to optimize property focused on future care needs. A growing demand for care is presenting itself, as are calls for cost containment. What does practice teach? That was the premise of Vastgoedjournaal's Healthcare & Real Estate conference last Jan. 28. "New business models can also serve the citizen," said Michel van Schaik, Rabobank Healthcare Director.

An integrated vision of healthcare real estate is proving to be more and more of a utopia. The separation of housing and care, as well as the entry of investors into parts of cure and care, have made the solution options more diverse. That is both a pleasure and a burden, says Roel de Vos, program director of Nieuw Amphia. The Breda hospital's Molengracht location has been expanded with 80,000 m² of new real estate, while existing buildings are being transformed for high turnover care. Other locations are being divested or downsized into day treatment centers. A development in line with the efficiency gains many multi-site institutions are making, but is it possible to plan for the life of a building? "Partly," says De Vos. "The old building is being renovated with an eye toward 25, 30 years." During that period, we will consider whether demolition or transformation is necessary. "In any case, we want to offer space to other operators so that patients do not have to stay in the top clinical part of the hospital by default. Those can then receive low-threshold care elsewhere."

Day chairman Daan Tettero interviews Willem Jan Hanegraaf of Rijnstate and Hein Uitterhaegen
Of St. Anthony.

Process approach

Process and execution of New Amphia are widely praised, with generic processes as components through an integrated approach, including facility aspects. For example, three ORs could be built less than intended by standardizing them and the new building is multidisciplinary organized around top clinical syndromes. But hospital construction remains customized. Hospital St Jansdal is facing a major renovation of the Harderwijk location and is still studying plans for the acquired hospital in Lelystad. The takeover appears to be well prepared despite the speed caused by the bankruptcy of owner MC IJsselmeerziekenhuizen, according to Chairman BoD Relinde Weil. "It had been rumbling in Lelystad for a while; we knew the patients. Prior to the takeover, we had already developed ideas." Construction Manager Anita van der Haar is now working on transformation plans. Clinical treatment with or without a stay in Lelystad, that is the question. "There are few benchmarks regarding this type of situation. Patients and staff are 'gold standard,' around that you have to develop a shell. In that area, we have decided to stand still for the time being."

Modular construction

The discussion focus was clearly on hospitals during the conference at Amersfoort's Prodentfabriek. New business models often come from the market, such as those of modular builders. The presentation by Jan Snel and acquisition partner Medexs showed that an expansion of an OR complex, such as the one at Utrecht's WKZ, can be realized in 3 months. "Modular construction is often confused with temporary, but we build turnkey and always within the Building Code to permanent healthcare buildings to the highest standards," says healthcare advisor Jorrit Janmaat of Jan Snel. Dutch regulations offer room for this type of development. "There is even a quality advantage, because we build under conditioned conditions. Moreover, the preliminary process turns out to be shorter than in traditional healthcare construction. We are now receiving inquiries for complete hospital complexes of up to 60,000 m²." "It can be modular approximately 10% cheaper than traditionally," adds business partner Jos Lans of Medexs.

The Healthcare & Real Estate conference attracted about fifty participants

Split

The solution to the "tight jacket" and uncertain horizons? Financial experts have their ears to the ground, but hospitals are holding on to their scope and scope of work. Day chairman Daan Tettero, associate director of Healthcare at investor CBRE, argues that the investor market is "growing out of its infancy" with an investment of more than a billion a year, and is increasingly mixing in first- and second-line care. "Not in the high-tech parts, but for example in health centers, parking garages and outpatient clinics." The split is visible at Rijnstate, which both divested an outpatient clinic to investor Cofinimmo and is going to build a new one in Overbetuwe. No problem according to Tettero, "the transaction to an investor flows back into the coffers and benefits healthcare." Investors are willing, "but don't expect high returns from investments in hospitals." Nor are the substantive trends unambiguous. "Outpatient care is moving toward primary care," says Hein Uitterhaegen, manager of Facilities & Real Estate Sint Antonius Hospital. But no one knows if primary care physicians are moving to hospital locations, or outpatient procedures to traditional practices and health centers. "Innovating often turns out to lead to difficult conversations about partitions in funding," he said. "Cooperation takes precedence over competition," believes Willem Jan Hanegraaf, program director Construction Rijnstate.

Digitization

And so the challenges intertwine. A dead giveaway it is not, because the Dutch healthcare market requires compromise and perhaps patience. Some investors focus on certain markets, such as those of the Science Parks (including USP, TU Delft). a.s.r. even made it a major fund. "On the Science Parks there are great opportunities for synergy between education, research and business," says Luc Joosten, Fund Director a.s.r. Dutch Science Park Fund. Institutions are often landowners, tenants steadfast. "There is exceptionally little vacancy on the Science Parks." Michel van Schaik of Rabobank summed up the day optimistically. "I see diverse programs and a diverse palette of financiers. The healthcare market is less closed than before. The boundaries with other markets are blurring, especially in living with care." Healthcare has more and more entrepreneurs and will digitize in the future based on platform technology. "Especially non-complex care, we cannot escape that. It is possible to develop new business models that benefit citizens. And when it comes to sustainability investments in the context of the energy transition: don't put them off, but pull them towards you."