For-profit care home stock in Europe’s four biggest care home markets
Care homes comprise the majority of investment volumes within health care real estate in Europe. There are tens of thousands of care homes across Europe, but it is typically only those in the for-profit sector that are available to be acquired by real estate investors. In this infographic we look at the care home stock in Europe’s four major markets for health care real estate investment – Germany, France, Spain and the UK – and provide estimates of how much are operated by for-profits.
Sophie Cooper, associate at real estate advisor CBRE, tells us that the only major markets for health and care real estate investment in Europe are the UK, France, Germany and Spain. There is also a market in the Netherlands, but since it is a smaller country there are far fewer assets available to buy.
According to the latest available figures from national and European sources, the UK has a total of about 16,700 care homes, Germany has about 15,400, France has about 7,500 and Spain has just over 5,500. About 13,550 (81%) of the UK’s homes are run by for-profits; in Germany, about 6,310 (41%) are; in France, about 1,800 (24%) are; and in Spain, about 1,670 (30%) are. Note that these numbers refer to individual care home sites, rather than bed capacity (France’s care homes are much bigger on average than the UK’s hence why its figure is much lower).
Sebastien Berden, COO at Cofinimmo, one of Europe’s biggest health care real estate investors, tells us that to get a rough idea of the size of the tradable stock of care home real estate assets within each of these countries you just need to look at how many are in the for-profit sector: there are generally restrictions around selling publicly-run homes and not-for-profit-run homes are often given subsidies which incentivise them to not do sale-and-leasebacks, so it is rare that the real estate for care homes in either of these categories comes up for sale (although some not-for-profit care home companies in the UK have done sale-and-leasebacks).
In the for-profit sector, the opposite is the case. Over the past couple of decades there has been a major trend towards the asset-light model of care delivery, to the point where now the majority of the for-profit care homes across the four markets are owned by a real estate investor. “The only two major exceptions to this are the two pan-European giants, Orpea and Clariane (formerly Korian), who until recently had about 50% of their real estate and are now looking at their finances, mainly because of that,” says Berden. “So I think you’re not taking a risk when you say more or less the whole for-profit sector is asset light. This means that if you look at the growth potential of the for-profit care home sector, any growth in that would also have correlational growth for the care home real estate market.”
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