Why Australian life sciences property and why now?

Structural long-run mega-forces are generating ongoing and persistent growth in demand

• Ageing population: Australia’s population aged 65+ will increase from 1 in 6 today to 1 in 4 Australians by 2060’s, with 85+ the fastest growing cohort.¹ This rise in the elderly population will drive structurally higher and recurring demand for pathology and diagnostic testing.
• Leading government healthcare spending and performance: Australia has recorded the highest growth in healthcare spending per capita across the advanced economies, increasing 5.7% CAGR since 2000, above the G12 average of 5%.² Australia also has an outperforming and productive health system, ranked highly for health outcomes, equity and efficiency.³
• Variety & complexity of testing: Growth in diagnostic testing reflects increasing variety and complexity (e.g. genomic monitoring and biomarkers, multi-panel testing), as well as the expansion of screening programs and early detection initiatives. Preventative healthcare is shifting upstream with an increasing focus on early intervention, expanding total testing volumes materially.

Critically essential services growing per capita and with the overall population

• Critical life sciences infrastructure: Australia’s private pathology sector provides critically essential healthcare infrastructure for illness detection and treatment.
• Non-discretionary demand: Consumption of these services has been resilient through economic cycles, with a strong link to population growth, ageing population, rising life expectancy, and ongoing technological advancements.
• High barriers to entry and limited supply: Significant capital requirements, stringent regulation, specialised facility requirements and scarce suitable real estate constrain new supply, supporting a highly concentrated market in which the three largest operators account for more than three-quarters of industry revenue.
• The availability and supply of high-quality real estate remains scarce: The sophisticated requirements of facilities make them challenging to deliver, and high development costs further limit new supply.

Healthcare expenditure reflects the ongoing growth in demand

• Ongoing government fiscal commitments: The FY27 Federal Government budget for healthcare increased commitments, with a ~17% increase in health expenditure forecast between FY26 and FY30.¹
• Rise in service usage: Pathology services provided under Medicare have trended upwards over the past decade. Over the last 20 years to FY25, the average annual number of Medicare pathology items claimed per person increased 75%, from 2.6 items to 4.6 items per person.³ In FY25 alone, 175 million services were provided under Medicare.⁴
• Medicare expenditure: ~$3-4 billion per year spent on Medicare-funded pathology in Australia. This equates to roughly 10-12% of total Medicare expenditure, the joint highest service volumes per capita with GP visits.⁵ 
• Growth of market: Australia’s pathology market is worth ~US$11.8 billion in 2025 and is forecast to grow to US$26.2 billion by 2034 (~9% CAGR).⁶

Resilient cashflow supported by public and private demand

• Public support for high quality operators: Given the government priorities towards balancing fiscal budgets, there will be an increased reliance on the sustainable growth of high-quality medical providers.  
• Medicare support: Pathology has resilient support from government-funding via Medicare (~70-90% of volume), with pathology traditionally recording one of the highest bulk-billing rates of any medical service (~91% in FY24, compared with an average of ~76% across other services).¹
• Resilient government cashflow: The government continues to commit to expanding test coverage, adding new reimbursable tests, and supporting access and volumes. Examples include Medicare-funded reproductive carrier screening tests and higher demand for genetic testing.
• Private sector filling the gaps: The private sector is also leaning in to make up deficits, with growing contribution from private insurance (via hospital diagnostics) and advanced diagnostics.

1. Australian Government – Australian Institute of Health & Welfare FY27 Government Budget.
2. Global Health Expenditure WHO, via World Bank 2026.
3. Commonwealth Fund – Healthcare system performance rankings.
4. IbisWorld.
5. Services Australia.
6. Imarc Group.

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