Health Care Real Estate Fund
S7C has set a comprehensive framework for selecting the sub-sectors which it will target. The framework has taken in consideration, among others, the following factors:
- Halal investing Concerns
- Investment Prospects
- Environment and Social Impact
- Demographic trends
- Impact of technology
As a result of this screening process, healthcare real-estate was selected to be the target sub-sectors for S7C yield funds. Our market research shows that healthcare is one of the top three sub-sectors that have highest return prospects in the coming years.
S7C worked with top Shariah, legal and tax counsellors to establish a scalable tax-efficient fund. At the same time, S7C collaborated with Mohawk Medical, one of the leading medical property management companies in Canada, to be the fund’s real-estate advisor and manage the acquired properties.
“Our active management approach adds significant value our limited partners by driving down the costs and optimizing the revenue in order to increase the assets value“
Reasons for Healthcare Sector
Because of its compelling investment returns and low risk, the senior housing sector continues to attract growing investments from institutional investors.
Over the next twenty years, the number of Canadians aged 75 and 85 will increase at a rate three to four times greater than the general population. The baby-boom generation is just beginning to enter their retirement years, and will generate growing demand for senior housing and other healthcare services
Increased Life Expectancy
Advances in health care and quality of life are increasing seniors’ life expectancy and thus the average length of stay of residents in seniors housing properties and their demand for healthcare services
Growing transaction volumes, that is driven by growing interest from institutional investors, have created greater liquidity in the sub-sector, which in turn has made investors more comfortable knowing that multiple exit strategies are possible
Appreciates over time
Rental rates for senior housing have been steadily increasing over the years way above the inflation rate. Likewise, in the medical office filed, doctor tenants rent grow at market rates while retail tenants (pharmacy, labs, x-ray, etc.) are naturally hedged as they pay rent based on percentage of sales
“Healthcare real-estate is recession resistant asset class that continues to deliver steady income and appreciation.“