Healthcare properties will find an increasing place in investment portfolios
Hospices as a share of investment volumes are displacing sales of homes for the elderly for the first time in five years in 2020 and in the first quarter of 2021, according to data from the consulting company in the real estate sector Colliers.
The growth in demand for more housing opportunities for older people will lead to a higher share of these assets in the investment market in the long run, experts say in a new report.
In the eight European countries included in the study – Germany, Britain, France, Italy, Spain, Poland, the Netherlands and Denmark, the population over the age of 65 is expected to reach a quarter of the total population of the countries and number 21.7 million. people between 2020 and 2035. This is more than the combined population of London or Paris and the Ile de France.
This is also a significant market force that must be met in terms of housing assets, experts say.
Colliers’ latest global investor survey shows that 21% of respondents have expressed interest in adult housing as an investment asset in 2021.
Although volumes of around € 7 billion per year are small compared to other sectors, the non-transparent and still immature nature of health properties as an investment grade means that the reporting of transaction volumes is undoubtedly lower than what happens in place, the report states.
Although the investment demand of primary and secondary healthcare facilities is lower, the sector will benefit from strong growth factors. In most countries, the level of hospital beds and state-provided medical care has declined over the last decade, with the shortage being offset by private, profit and non-profit operators.
In the United Kingdom, Poland and Denmark alone, most hospital beds are provided by the state. In Germany, France, Spain and Italy, this percentage has dropped to an average of around 60%, and various investors and operators from these countries are clearly expanding their sphere of influence across the continent.
Rising consumer spending on private health and private health insurance will continue to stimulate the main demand for a wider range of health assets, as the expansion of public insurance will remain weak. This will create additional opportunities for investors, albeit with a more complex and niche nature.
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