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Investor run on healthcare real estate continues – Four-percent prime yield threshold under pressure

Verena Bauer • 14/10/2021

According to a survey by international real estate consultancy firm Cushman & Wakefield (C&W), German healthcare real estate market transaction volume amounted to approximately EUR 540 million in Q3/2021. Meaning that around EUR 1.7 billion has flowed into this asset class since the beginning of the year.

Nursing homes and senior residences top with investors
The transaction volume in the care sector totalled about EUR 440 million in the third quarter, of which about EUR 250 million went into nursing homes and about EUR 190 million into senior residences with assisted living. Medical centres and clinics accounted for 18 per cent of the total, with around EUR 97 million.

 

Healthcare Investmentmarkt

Prime yields pushing the four-percent mark
Nursing homes continue to achieve prime yields of four percent. Many new investors recognise the crisis resilience and relevance of healthcare properties and are looking to enter the German healthcare market. This is leading to a further increase in demand, which, however, is confronted by a lack of product. Therefore, the yield compression that has already existed for some time will intensify. It is assumed that the prime yield for nursing homes will fall below the four percent mark by the end of the year. In addition, the transaction volume will rise to over EUR 2.5 billion, as some larger transactions are expected in the 4th quarter. However, the fact that the annual result will probably fall short of that of 2020 is not due to any decline in investment interest, but solely to the lack of available properties in this asset class.

 
 

MEDIA CONTACT

verena bauer
Verena Bauer

Head of Marketing & Communications Germany, Cluster Lead • 60313 Frankfurt am Main

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