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Investments in healthcare real estate increase significantly - prime yield could fall below 4%

Verena Bauer • 14/07/2021

According to a survey by international real estate consultancy firm Cushman & Wakefield (C&W), healthcare real estate investment volume reached over €1.15 billion in the first half of 2021. This is 35 % more than in the same period last year. 

The sale of 19 care facilities by Azurit to Aedifica in the first quarter of 2021 as well as the acquisition of five care and senior living facilities by Capital Bay in the second quarter played a decisive role in achieving this figure. Overall, portfolio transactions accounted for around 30% of total volume in the first half of 2021. 

The transaction volume in the care sector totalled around 920 million euros, of which around 550 million euros was invested in care homes and over 370 million euros in senior residences with assisted living. Medical centres accounted for 20% of the total transaction volume, at about 230 million euros.

Healthcare Investment

"The reason for the increasing interest in nursing care real estate is the high system relevance, the progressive professionalisation of operators and the strong growth in demand due to demographic change," says Jan-Bastian Knod, Head of Healthcare Advisory at C&W. "In addition, investors’ desire to increase the diversification of their portfolios via healthcare real estate is growing," Knod continues.

Care homes in particular continue to achieve prime yields of 4.0 %. This is due to the lack of suitable product combined with high capital placement pressure and strong demand from institutional investors. C&W therefore expects yield compression here in the course of the coming months. It remains unclear whether the 3 billion euro transaction volume mark might be exceeded by the end of the year.

 

   

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verena bauer
Verena Bauer

Head of Marketing & Communications Germany, Cluster Lead • 60313 Frankfurt am Main

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