Primary care centre network will require €2.55bn investment

Up to €2.55 billion will need to be spent to deliver the volume of primary care centres required to handle the requirements of Ireland’s growing population.

That’s the key finding of a new report on the sector from CBRE.

While the figure is significant, it can be explained to a large extent by the relatively low level of investment in primary care centres since the Department of Health first proposed their development in 2001.

Commenting on the level of delivery achieved since then, Cormac Megannety, head of the healthcare department at CBRE Ireland said: “When this concept was first mooted in 2001, the ambition was to deliver 536 centres throughout the country. However, this has proven overly ambitious. CBRE research shows that just 81 new purpose-built primary care centres have been delivered since 2001, with the vast majority of these having been delivered since 2012. There is now a clear need for the HSE to fast-track delivery of the many schemes that are in the planning process and simplify the leasing system to ensure that we continue to attract investors. This will enable us to deliver primary care centres at the rate at which they are needed.”

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According to CBRE’s estimates, some €750 million has been invested in the development of purpose-built primary care centres in the last 15 years. A further €550 million will be required, it says, to complete the construction of the 44 primary care centres for which planning permission has been granted, while an additional €2 billion will need to be deployed to deliver the volume of facilities required based on demographic projections.

Modern primary care centres have proven very attractive to investors in recent years, with several specialist healthcare investors such as PHP Healthcare, Glencar Healthcare and Valley Healthcare attracted by the State covenant and what are typically long-term leases.

About 38 per cent of Ireland’s purpose-built primary care centres are now in private investor ownership. Investors are predominantly interested in the modern purpose-built facilities which typically feature the Health Service Executive (HSE) as the main tenant, while several facilities also accommodate GP practices, pharmacies and accommodation for State institutions such as Tusla. The presence of the HSE is common to all primary care centres and occupation is generally by way of a 25-year lease. In some cases, leases are for a 30-year duration, making the primary care centre a more attractive investment.

To date, the development of purpose-built primary care centres has tended to focus on areas of highest population and HSE demand, with Leinster accounting for 50 per cent of the total and Dublin in turn accounting for 44 per cent of Leinster’s total. In addition to these purpose-built primary care centres, there are 63 facilities which are deemed to be primary care centres but which were never purpose-built for this use while a further 147 are housed in older health care centres.