Spotlight on European healthcare real-estate investors
The consolidation of healthcare services is driving demand for specialised healthcare property investment, especially in nursing homes, hospitals and clinics.
More than ever, we have recently seen healthcare property investors keen to expand geographically – Aedifica entered the UK last January and just recently put in a bid on a Finnish property investor, which would mark its first foray into the Nordics. Cofinimmo entered the Spanish market in September with the construction of a care home in Galicia, a market in which a Spanish REIT in-the-making now has €300m in managed assets.
Investors are attracted to three key factors: ageing populations that drive growth in residential nursing home numbers, strong public financing of both healthcare and elderly care in particular and the increasing size of national consolidators. The latter means many large operators look for property investors that can manage ever-growing portfolios.
The big French nursing home groups are leading this trend. Orpea would be somewhat of an outlier as the group aims to own 50% of its property, but rival Korian signed a deal with property investor Primonial REIM last year to regenerate many of its homes and grow its rehab services in France – a market where nursing home bed numbers are capped and where such deals can help operators achieve some growth through price increases.
In Germany, we see an interesting property play opening up as staffing costs are pushing intensive care services away from homecare and towards specialised residential care.
Aedifica tells us average gross rental yields have compressed strongly, bringing levels close to 5-6% across Europe. This means the decision to enter a market will rest less on differing yield levels and more on a country’s risk-profile – whether public financing of services is strong, or how fast its population is ageing.
We would welcome your thoughts on this story. Email your views to Anaïs Charles or call 0207 183 3779.
