Among post-COVID trends, one for Aussie investors to be aware of is a notable demographic shift to regional centres.

With travel curtailed amid the broader disruption caused by the pandemic, residents of Australia’s larger cities have increasingly assessed the benefits of a change in lifestyle.
 

Follow the money

In terms of market sentiment, that shift is already being recognised in property prices.

With interest rates at rock bottom as the economy recovers, home values have been rising in all states and territories.

However, data from CoreLogic shows that in 2020, homes in regional areas rose by 6.9 per cent — a capital gain three times that of the average rise for Australian cities.

It’s also a trend that has continued steadily into the new year.

“Internal migration data shows more people are leaving Sydney and Melbourne for regional areas, resulting in a transition of activity from the metro regions to the outer fringe and regional markets,” said Tim Lawless, CoreLogic’s head of research.
 

Looking to capitalise

Animal health company Apiam (ASX:AHX) is one of the ASX players looking to hitch a ride to those broader demographic tailwinds, as it ties its business strategy to a number of fast-growing regional growth corridors.

Regions where the company is focused on establishing a footprint for vet and animal health services include the major Victorian catchments such as Torquay and Geelong, as well as strong growth metrics in south-east Queensland (SEQ).

For example, a recent research report commissioned by the city of greater Geelong shows that over the coming decades, the city will attract more than half of all new regional Victorians by 2050.

In addition, the population of SEQ is expected to grow by more than two million people over the next 25 years.

For Australian companies that can get a first-mover advantage, those kind of demographic changes represent a new opportunity to establish viable long-term growth in new addressable markets.

And it’s an expansion strategy that Apiam CEO Dr Chris Richards is committed to over the medium-term, with more acquisitions in the pipeline to corner those changing markets.

Earlier this year, the group opened a new veterinary clinic in Torquay North, Victoria, with another clinic set to open soon in Shepparton.

That followed similar strategies into the end of 2021, when the company snapped up Don Crosby Veterinary Surgeons — a privately-owned vet practice situated in the regional centre of Dubbo.

Speaking with Stockhead recently, Richards said Apiam’s new Torquay clinic hit the ground running, generating revenues almost immediately.

“So I can see us doing three-to-four of those a year as we expand into these new growth corridors, with new large subdivisions happening in those regions,” he said.

As an animal health and veterinary business, Apiam has also responded to other post-COVID changes to its business such as increased rates of pet ownership.

But he said Apiam’s strategy is proof that successful Australian business models don’t have to be focused on the capital cities.

A “demographic change” is underway, where more people are moving to these key growth corridors that sit within 150km of the capital cities,” he said.

“The thing to emphasise is ‘regional’ isn’t in the outback, it’s within a 30 minute drive of a capital city and that’s really important.”

So while Apiam is currently one of the few ASX small caps with a dedicated regional growth strategy, it might not be long before a new wave of companies hit the market with business models serving those booming regional growth corridors.

At Stockhead, we tell it like it is. While Apiam is a Stockhead advertiser, it did not sponsor this article.