International real estate consultancy firm Cushman & Wakefield (C&W) reported German healthcare real estate transaction volume of around EUR 525 million in Q1 2022, making it the second strongest first quarter of the past ten years. The majority, some EUR 413 million, was generated by care property transactions.
Nursing homes and senior residences clear focus of attention
Transaction volume in the care sector totalled approximately EUR 413 million in the first quarter. Transactions in medical healthcare real estate amounted to approximately EUR 113 million, for which the clinic segment was largely responsible.
Jan-Bastian Knod, Head of Healthcare Advisory and Residential Advisory at C&W: "Care real estate continues to generate the majority of transaction volume in the German healthcare real estate market. The prime yield for nursing homes remains at around 3.9 percent - the prime yield for assisted living is significantly lower at around 3.0 to 3.5 percent. However, some investors’ interest in medical care centres and rehabilitation clinics is also high and limited only by the lack of product. Especially in the top-7 cities in Germany, available healthcare property remains a rarity."
Individual-property transactions determine market
Individual-property transactions accounted for some EUR 301 million or 57 percent of volume. One large-volume portfolio sale alone contributed almost the entire portfolio transaction volume in the segment.
German capital sources dominate the healthcare real estate market
In Q1 2022, domestic capital sources invested approximately EUR 250 million in German healthcare properties. Among international capital sources, French capital made the largest contribution, followed by Swedish and Swiss capital.
Jan-Bastian Knod explains: "At the beginning of the year, the continued strong investor interest in German healthcare real estate is reflected in the total transaction volume. Foreign capital sources are particularly strongly focused on seeking potential large-volume portfolio acquisitions."
C&W expects investor interest in German healthcare properties to remain high over the course of the year. The current lack of product, especially extant properties, will lead to further increases in purchase prices.
