Doctors branch out: How 1Group helped a new clinic get established in an ideal location

Sydney

Purpose

We were engaged by four doctors splitting away from a corporation, as they wanted to do health care the ‘right way’ for the community. They were aiming to offer a diverse range of specialised GP services that would be a private billing high-care model. The brief was to find the optimal location and then the right property, at the best possible price.

What We Did

They had a hunch on a few areas which we explored. Through extensive research, we were able to quickly eliminate these suburbs do to having sufficient doctors meeting the population needs, with additional permits at council for new clinics that were being built.

Through this research process, we found a suburb inside 15km from their current location which was in a better demographic for private billing (higher incomes, more professionals). It was an area with an ageing doctor community with older centres, ageing fit outs and properties that didn’t allow them to scale, even if they wanted to.

How We Did It

Using GP mapping tools, we located ancillary services they could leverage and population forecasts that helped in the decision making process. We conducted ‘mystery shopping’ activities at the local medical clinics to gauge competition. Additionally, we walked the high streets and assessed the property landscape in the target region.

The optimal plan would have been to buy or even develop, as commercial property in this region is either small retail or larger industrial, and a residential conversion wouldn’t work for the size of clinic they were looking to create. However, due to being a ‘start up’ business, the partners agreed to lease first and then look to expand into their own site after the first lease term if things went well.

We identified a small local shopping centre that already had a doctor tenant, but the clinic was small, they couldn’t expand their current footprint, and they served a niche part of the community.

Result

Acquired an ideal property with incentives

The strategy of launching in a shopping centre owned by a ‘fund’ meant the incentive would be very high, removing some of the cost to get started, allowing them to move sooner. Funds are often willing to pay big sign-on incentives, fund fit outs and offer rent-free periods as the lease being added to the overall income of the centre is how their investors measure performance.

The overall incentive achieved was close to 40%, which meant our clients could run the first term of seven years and then look to move the clinic if compelled to, or consider a second smaller location to offset the fact they are someone else’s tenants.

Long-term approach

Naturally, the primary goal is always the business succeeding over owning the property, but any decision or commitment made must take into consideration the longer-term aspirations of the business owners.  

The business is now thriving and the doctors are already thinking about their next phase.

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