- Transaction volume of around €690 million in Q1 2025, best start to the year since 2021
- Prime yields for care homes at 5.10 per cent and for assisted living at 4.50 per cent
- City of Hamburg (HGV) buys care platform ‘Pflegen & Wohnen Hamburg’ for around EUR 380 million
- Family offices, private equity, investment managers and listed companies/REITS pursue an expansive investment strategy for 2025
- New-build properties & existing properties with ESG appreciation potential equally in the focus of German & international capital sources
Cushman & Wakefield, a global property consultancy, recorded a transaction volume of around €690 million in the German healthcare property market in Q1 2025 (Q1 2024: around €134 million).
Transaction volume and prime yields for healthcare properties stabilised
At more than €453 million (around two thirds), the ‘Nursing Homes’ segment accounted for the lion's share of the transaction volume, with the acquisition of the Pflegen & Wohnen Hamburg Group by HGV as the municipal group holding company of the City of Hamburg, the seller being Deutsche Wohnen, totalling more than €380 million.
Assisted living accounted for around €138 million, the inpatient medical care segment contributed around €23 million and outpatient medical care around €80 million. Portfolio transactions dominated in the 1st quarter with around €400 million (58 per cent of the transaction volume), also as a result of the purchase of ‘Pflegen & Wohnen Hamburg’.
Investment market for healthcare properties liquid, continued investment interest from international investors
Healthcare properties remain the focus of institutional investors’ alternative investment strategies. The takeover of the Katharinenhof Group by a fund managed by Civitas Investment Management at the end of 2024 and the takeover of the Pflegen & Wohnen Hamburg Group by HGV this quarter illustrate that large-volume transactions are possible in the German healthcare property market. International investors in particular are showing great interest in investing in Germany.
There is also plenty of liquidity for single-property transactions, as the transaction volume of almost €300 million this quarter shows.
‘Investors are looking for healthcare properties, particularly in the care segment and outpatient medical care centres/doctor's surgeries, either for new properties that have been completed in the short term or existing properties with development potential’, explains Jan-Bastian Knod, Head of Residential Investment & at Cushman & Wakefield. ‘We are seeing a convergence in the sales price and yield expectations of sellers and buyers. Operator creditworthiness and location quality remain decisive for the liquidity of the investment product’, continues Jan-Bastian Knod.
Prime yields remain stable, development dependent on macroeconomic changes
Prime yields for healthcare properties have now remained stable for the seventh consecutive quarter: for nursing homes at 5.10 per cent, for senior residences in the assisted living sector at 4.50 per cent, for outpatient medical care facilities (MVZ) at 4.75 per cent and for inpatient medical care facilities (clinics) at 5.75 per cent. Prime yields are expected to remain stable over the course of 2025.
Investor survey 2024/2025 shows who will be particularly active in 2025
A survey conducted by C&W at the end of 2024 among institutional property investors and project developers who are active in the German healthcare property market and in some cases even specialise in it or have expressed an interest in it has shown that family offices/private individuals, private equity and listed companies/REITS will pursue an expansive investment strategy in 2025. These buyer groups have very different business plans in some cases and have very different buyer profiles in terms of sub-asset class and risk profile. It is therefore to be expected that there will be plenty of liquidity for transactions for small and large-volume projects.
