Government initiative expected to boost investor interest in inpatient and outpatient facilities
- Transaction volume in the healthcare sector reached €887 million in the first half of 2025 (H1/24: €258 million), of which €194 million was in the second quarter
- Prime yields for nursing homes remain at 5.10 percent, for assisted living at 4.50 percent
- Investment market stays liquid – national and international capital sources show interest
- In its coalition agreement, the German government names ‘stambulante’ care as a funding goal with the intention of sensibly combining inpatient and outpatient services and thus strengthening them
- New and existing properties with ESG upgrading potential equally in the focus of German and international capital sources
Cushman & Wakefield, a global real estate consultancy, recorded a transaction volume of around €194 million on the German healthcare real estate market in the second quarter of 2025 (Q2 2024: around €124 million). Due to the strong previous quarter, the investment volume for the entire first half of the year totaled around €887 million, almost 3.5 times the figure for the same period last year.
The nursing home segment accounted for the lion's share of the transaction volume with more than €87 million. Around €86 million was attributable to assisted living, while the outpatient medical care segment contributed around €18 million. No major transactions were recorded in the inpatient medical care segment in the second quarter. Individual transactions dominated in the second quarter with around €129 million.
Prime yields remain stable
Prime yields for healthcare properties remain at a consistent level: 5.10 per cent for nursing homes, 4.50 per cent for senior residences in the assisted living sector, 4.75 per cent for outpatient medical care facilities (MOBs) and 5.75 per cent for inpatient medical care facilities (clinics). Prime yields are expected to remain stable throughout 2025.
Investment market for healthcare properties remains liquid despite decline in transaction volume - institutional investors show interest in investing
Healthcare properties remain the focus of alternative investment strategies for institutional investors. The market remains liquid, with investors still looking for short-term investment opportunities for the second half of 2025. Following the very large portfolio transactions of over €300 million each in the fourth quarter of 2024 and the first quarter of 2025, only smaller portfolio and individual property transactions were recorded in the second quarter of 2025.
“Volumes between €20 million and €50 million appeal to most investors, especially national sources of capital. Liquidity is available for this at any time. At the same time, the market has potential for transactions with a total volume of over €100 million. Foreign sources of capital from North America and Asia in particular are looking for diversified portfolios with good locations and one or more operators with strong credit ratings,” says Jan-Bastian Knod, Head of Healthcare Advisory at Cushman & Wakefield. “The selling price and return expectations of sellers and buyers have converged."
Nevertheless, the creditworthiness of the operator and the quality of the location determine the liquidity of the investment product,” Jan-Bastian Knod continues. New construction activity remains low and there is a lack of adequate investment products available. Existing properties continue to be of interest to investors. This is particularly true for investors who pursue a refurbishment strategy for older existing properties regarding legal requirements and compliance with ESG investment criteria.
Federal government plans to expand and support ‘stambulante’ care provision
The federal government is planning targeted support for so-called ‘stambulante’ care models, which combine outpatient and inpatient services meaningfully. The aim is to enable people in need of care to live independently in their familiar surroundings and to make care more efficient. Financial incentives, model projects in rural areas and improved remuneration are intended to strengthen innovative forms of care. The first pilot projects are scheduled to start in 2025, with a nation-wide funding framework planned for 2026. This means a change at the operational level, with the aim of making processes more efficient and improving them.
Jan-Bastian Knod comments: “These projects could also be of increased interest to investors, as they simplify the operation of the facilities and also allow operators to address a larger target group. The economic situation of care facilities could benefit from this, and for investors it would mean greater rental security.”
