It is no secret that the Covid-19 pandemic has put enormous amounts of pressure on the delivery of healthcare, while simultaneously accelerating sector-specific innovation to allow for fair dissemination across all parts of society. With doctors’ surgeries across the globe unable to carry out ‘in person’ routine appointments for a large percentage of 2020, the opportunity for a digital healthcare revolution came to a head, bringing with it potential changes for healthcare-related real estate.

The rise of telehealth

By using digital services, healthcare professionals have diagnosed and treated diseases and injuries, conducted research and continued to support the education within the medical industry.

While US data shows that telehealth visits increased by 154 per cent year on year (March 2020 against March 2019), the OECD states that around three quarters of its member states already had legislation, strategy or policy on the use of telehealth prior to the pandemic. Nevertheless large sums of venture capital investment (+109 per cent to US$3.7 billion year on year) into the sector since Covid-19, has cemented the fact that telehealth is not a passing fad to be ignored.

Housing the digital healthcare revolution

The advances in telehealth have already had and are likely to continue to dramatically impact real estate and the types of space needed, notably by operators and GPs. With forecasts showing a relatively small decline in face-to-face appointments (-15 per cent) in spite of more digital services available, it’s unlikely that there will be a an overall decline in square footage required, rather that we will see the space targeted at more specialist areas within healthcare, such as mental health facilities and new areas for physical diagnostics and treatment.

Taking this one step further and the sector could even look to take space in other underutilised or redundant real estate assets such as retail. In the UK, the NHS is looking to roll out a new diagnostic centre concept to community hubs to relieve pressure on hospitals, including in shopping centres and out-of-town retail units.

Remote monitoring may change care models

The wider adoption of remote devices to help diagnose and monitor people will also have an indirect impact on real estate

With many countries having ageing populations and fewer younger people to care for them, technology could help mitigate dependency ratios and allow people to age at home for longer, freeing up specialist accommodation, but also potentially reducing the volume of homes available on the open market.

An increase in operationally light ‘housing with care’ retirement villages could address this concern, while offering the social interaction that independent living can’t satisfy.

If remote monitoring via devices means shorter periods in care homes, the overall nature of care space may also need to evolve. Turnover of residents could rise, putting pressure on income stability and operational efficiencies, and increasing costs. This may trigger a review of the types of facilities required, with a greater need for more operationally intensive models.

Further information

Contact Craig Woollam or Paul Tostevin

Savills Impacts: Digital Healthcare