Cushman & Wakefield recorded a transaction volume of approximately EUR 717 million in the German healthcare property market in Q4 2024 (Q4/2023: around EUR 186 million). This brings the total transaction volume in the healthcare property sector for 2024 to around EUR 1.3 billion, reflecting an increase of over 28 per cent compared to the previous year.
Transaction volume and prime yields for healthcare properties stabilised
The transaction volume reached over EUR 717 million in Q4 2024. Within this, the nursing home segment accounted for the largest share, with more than EUR 434 million. Assisted living accounted for around EUR 208 million, the inpatient medical care segment contributed around EUR 64 million, and outpatient medical care approximately EUR 11 million. The Katharinenhof Group was acquired by a fund managed by Civitas Investment Management for a total of over EUR 300 million, which includes a portfolio of 26 care properties and the operating platform. Portfolio transactions dominated in Q4, with around EUR 439 million (61 per cent of the transaction volume).
Prime yields remain stable, with a downward trend as the year progresses
Prime yields for healthcare properties have remained stable for six consecutive quarters: unchanged at 5.10 per cent for nursing homes, 4.50 per cent for senior residences in the assisted living sector, 4.75 per cent for outpatient medical care facilities (MVZs) and 5.75 per cent for inpatient medical care facilities (clinics). Prime yields are expected to remain stable throughout 2025. However, in the second half of 2025, yield compression may occur due to an improving financing environment and increasing from institutional investors.
German healthcare properties attracts interest from international investors
Healthcare properties remain a key focus of alternative investment strategies for institutional investors. The acquisition of the Katharinenhof Group demonstrates that large-scale transactions are possible in the German healthcare property market, with international investors showing great interest in investing in Germany. ‘The care segment continues to dominate transaction volume in the healthcare sector, but there is plenty of liquidity available for all sub-asset classes, regardless of risk category,’ explains Jan-Bastian Knod, Head of Healthcare Advisory at Cushman & Wakefield. ‘Due to the lack of available products, particularly in the new-build healthcare properties, investors are also increasingly considering the option of investing in project developments through forward deals to secure assets early on. Nevertheless, longer forward periods of more than six months until completion remain (for now) unfeasible for many investors. It remains to be seen whether the willingness of investors to pursue such investment opportunities will increase over the course of the year,’ continues Jan-Bastian Knod.
Investor survey 2024/2025 Reveals Key Areas of Activity for 2025
A recent survey conducted by C&W among institutional property investors and project developers active in the German healthcare property market, some of whom even specialise in this sector or have expressed interest, revealed that family offices/private individuals, private equity, and publicly listed companies/REITS will pursue expansive investment strategy for 2025. These buyer groups often develop very different business plans and display diverse buyer profiles regarding sub-asset classes and risk tolerance. As a result, significant liquidity is expected to be available for both small- and large-scale project transactions.
