Article
A Medical-Retail Mash-Up Is Transforming Healthcare Delivery
October 7, 2024 4 Minute Read
Anyone who’s visited a hospital knows it can often be a stressful and time-consuming experience. Provincial governments are trying new partnerships and delivery models to improve access to healthcare and the retail sector is benefitting from the shift.
According to CBRE’s latest Canada Retail Rent Survey, the medical service, or retail health, sector is seeing increased market penetration. Improved government funding and the entry of international medical and pharmaceutical companies are moving healthcare delivery beyond the hospital.
“There is an immediate need for more healthcare support across Canada,” says CBRE’s Toronto-based retail broker Kate Camenzuli, who works with medical service providers looking for commercial spaces. “Retail is built in proximity to the population, often with transit in mind. It can provide convenient solutions for medical practitioners and support better healthcare delivery.”
Finding the Right Fit
While your local coffee shop can slot in just about anywhere, medical services have specialized requirements for where they can operate.
MRI clinics, for example, can’t be located near subways to ensure vibrations don’t interfere with imaging. Some medical tenants need locations near hospital systems, while others need extra storage space for equipment and pharmaceuticals.
“Medical services can take many different shapes – retail space, offices or even flex-industrial facilities,” Camenzuli says. “The most critical factor is having the right zoning and understanding how each space can support a client’s operations.”
Creating Partnerships
Public-private partnerships have played a vital role in the growth of the medical service sector across Canada.
In British Columbia, the partnership healthcare model encourages the collaboration of health authorities, service providers and vendors to support better healthcare delivery. For instance, some audiology clinics and surgical suites have partnered with hospitals to handle overflow.
CBRE’s Vancouver-based broker Adrian Beruschi says this has led to the expansion of medical service providers into new retail and mixed-use developments. “Medical service providers in B.C. have had an insatiable appetite to acquire retail properties in new developments in mature and emerging neighbourhoods. Medical and dental users, both chains and startups, are the primary candidates for purchasing retail strata units in new developments.”
It’s a similar story in Ontario, where medical retail groups and private practices affiliate themselves with hospitals to handle high demand. Hearing, optical and cosmetic surgery clinics have been opening new locations to offer private or public services, and some doctors have partnered with other medical professionals to provide a variety of services under one roof.
“These new models can help bridge the gap between public healthcare needs and private sector capabilities,” Camenzuli says. “Retail real estate is helping the medical sector progress and is supporting the evolution of how patients access healthcare in Canada.”
Canada’s Global Appeal
Canada can be attractive to international health service companies, with the public healthcare system offering different collaboration and funding opportunities.
Camenzuli recently assisted a partnership between an international pharmaceutical company and a domestic organization to open five plasma centres across Ontario. She is also working with MRI providers and audiology clinics expanding their services in the province.
“Companies that understand the nuances of the Canadian healthcare sector and that find the right partners have the potential to make a large impact,” says Camenzuli. “This collaborative approach will help create new spaces for healthcare delivery and support economies of scale.”
Just the Beginning
Camenzuli is confident that Canada’s medical service sector will continue growing as the population expands and ages. “We’re living longer than ever, so the demand for medical services is increasing rapidly,” she says. “We need to look at traditional real estate uses with fresh eyes to support the innovation of healthcare delivery.”
She expects greater integration of medical services within the community as private and public groups partner on long-term care, outpatient services and specialized treatment centres for dementia, addiction, mental health and fertility. She also predicts further consolidation of dentist offices and small medical practices with limited succession planning, as well as growth in the radiology space to address backlogs in hospitals.
“Promising innovation and talent are coming into this space,” says Camenzuli. “It’s exciting to support this shift and be more than just real estate; we’re helping improve the wellbeing of Canadians.”
Recent Insights
-
Fraser McKenna and his team are working with Beedie, a West Coast residential and commercial developer, to sell industrial condo units at BOLT, its new development in Bolton, ON.
-
The Canadian retail sector faces robust demand, low vacancy rates and limited construction activity, but CBRE’s Alistair Corbett says new developments are about to kick off in Alberta.
-
CBRE Group, Inc. earlier this year combined its project management business with Turner & Townsend, a majority-owned subsidiary that provides program management, cost consultancy and project management services globally.
Stay In The Know
Subscribe today and join hundreds of professionals who get the latest blogs delivered straight to their inbox.