Hospice Waikato is expanding the Gallagher Family Hospice building on Cobham Drive because of an increase in demand.
The expansion, which began last week, will create car park spaces for visitors and an additional building to cater to the increase.
The demand for hospice services has been driven by an increase in referrals from Waikato Hospital and across the region.
Hospice Foundation chairman John Erkkila said they did not expect such an increase so soon, but had already planned for an expansion when the facility was built five years ago.
"We have experienced five years of rapid growth, and when you have a growth service, you also have additional demands, such as increased staffing levels and of course with that comes increased demand for parking, and that has become a significant problem for us."
Hospice Waikato chief executive Craig Tamblyn said the expansion would address problems that had arisen from the demand. "We want to make it as safe and as easy as possible for [people] to visit and use our services. As well as providing more parking, the expansion aims to extend our Wellness Centre, providing more space for creative therapies, counselling and support groups for patients and family members."