Deals in health care real estate have suffered from the same issues as deals in opco in the last couple of years. Investment dropped by a staggering 45% in 2023, after having dropped 10% in 2022.
The above graph shows data from CBRE, a real estate advisory, on the total amount of investment into health care real estate across Austria, Belgium, Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden. Switzerland the UK and CEE. The figure for 2023 would be a lot higher if France were included, thanks to one huge deal – Primonial’s €7bn acquisition of Icade’s health care portfolio.
But it is clear demand for health care real estate has been heavily hit in 2022 and 2023 across Europe.
Blame lies in the familiar place – high interest rates have pushed up the cost of borrowing which has made large acquisitions for both opco and propco less viable, and potential sellers (of whom there are still plenty of) have been reluctant to lower their price expectations.
Our healthcare property report 2024 is now live – HBI Intelligence and Connect subscribers, click here to download your copy.We would welcome your thoughts on this story. Email your views to Joe Quiruga or call 0207 183 3779.