According to the latest Healthcare Report 20261 by Cushman & Wakefield, healthcare real estate has developed into one of the most structurally attractive asset classes in Germany, offering long-term stable returns that are largely independent of economic cycles and becoming increasingly relevant for institutional investors’ allocation strategies.
Driven by demographic change, the growing burden of disease and increasing care requirements, as well as policy guidelines such as “outpatient before inpatient”, care properties and assisted living schemes, Medical Office Buildings (MOBs), and preventive care and rehabilitation facilities offer long-term returns.
Jan-Bastian Knod, Head of Healthcare Advisory at Cushman & Wakefield, comments: “Healthcare real estate is among the most structurally attractive asset classes, underpinned by demographic change and demand that continues to grow regardless of economic conditions. Over recent years, assets in this sector have increasingly evolved beyond a niche product and have become a strategic core component of institutional portfolios.”
Healthcare real estate investment market: structural shortage meets increasing capital pressure
All three segments, namely nursing care, outpatient healthcare and preventive care and rehabilitation, are characterized by supply shortages. At the same time, interest from institutional investors is increasing.
Forward funding deals, development projects and joint venture structures are expected to gain importance. They provide early access to the market.
Key trends in healthcare real estate investment at a glance:
- Supply shortages driving returns: Low levels of development activity in recent years, partly due to high construction costs, are meeting rising demand in this segment. This is supporting returns and increasing the attractiveness of investments in existing assets.
- Structural change in outpatient healthcare: The strong growth of Medical Office Buildings (MOBs) is leading to larger organizational structures. This reduces operational risks and increases economies of scale. Longer lease terms, stronger tenant creditworthiness and lower volatility are enhancing attractiveness for potential investors.
- Preventive care and rehabilitation facilities combine strong demand with attractive returns and can complement traditional care investments. Here too, the political commitment to the principle of “rehabilitation before retirement” is having a positive impact on the attractiveness of this sub-sector.
- An important theme remains operator consolidation in the care and assisted living sectors: While the market share of the top 30 operators continues to grow, the sector still offers significant consolidation potential and presents opportunities for private equity investors, strategic buyers and operator partnerships.
“Institutional capital will continue to increase investment across all three main segments of the healthcare real estate market, driven by demographic change, an attractive risk-return profile and growing ESG awareness that is placing social infrastructure firmly in the spotlight. Operator quality, location selection and timing of market entry will be decisive factors for investment success”, says Jan-Bastian Knod.
The MOB example: “Outpatient before inpatient” – sharp rise in the number of Medical Office Buildings increasingly attracting investors once again
The outlook is particularly positive for outpatient medical care. The number of Medical Office Buildings (MOBs) alone has more than doubled since 2014, reaching almost 5,100 facilities by 2024. Transaction volume has also rebounded strongly following very strong years in 2021 and 2022 and a slowdown in 2023 and 2024. As in the healthcare sector overall, transaction volume in 2026 had already reached €356 million after just six months, significantly exceeding the full-year volumes recorded in 2023, 2024 and 2025 respectively.
Jan-Bastian Knod comments: “In addition to traditional core investors, an increasing number of specialized healthcare funds are aligning their strategies towards Medical Office Buildings. They benefit from the policy principle of ‘outpatient before inpatient’ and the increasing specialization of medical services. Investors therefore gain access to a market characterized by high rental stability, long-term lease agreements and secured demand. Knod continues: “Transaction volume in this sector only partially reflects the actual market dynamics. The key constraint on higher levels of activity is not a lack of demand but a structurally limited supply. Given the structural excess of demand and increasing capital pressure on the investor side, transaction activity is expected to expand significantly over the medium term, including through development projects, forward funding deals and the conversion of existing properties into Medical Office Buildings.”
[1] The Cushman & Wakefield Healthcare Report 2026 analyses the segments of nursing care & assisted living, outpatient medical care, and preventive care & rehabilitation in Germany, providing market indicators, yield benchmarks and investment perspectives for institutional investors and market participants.
The full report is available upon request.
