Healthcare shifting from niche asset class to mature market

Institutional investors are increasingly attracted by healthcare, which is transitioning from niche asset class to mature market

Paola Delmonte, Chief Business Development Officer, CDP Investimenti Sgr, Matthias Schulgen, Healthcare Portfolio Manager, Corpus Sireo Real Estate GmbH, Davide Braghini, Partner Co-Head of Real Estate, GOP, Ron van Bloois, Partner, HEVO and Alessandro Sparaco, Managing Partner at Threestones Capital discuss possibilities for investment in the European Senior living and Healthcare sectors. Filmed at MIPIM 2019 by Real Asset Media.

Institutional investors are increasingly attracted by healthcare, which is transitioning from niche asset class to mature market, experts agreed at Real Asset Media’s Senior Housing & Healthcare Investment Briefing, which was held at MIPIM in Cannes.

‘The trend we are currently seeing in the market is that healthcare is becoming a mainstream asset class just like residential, office or retail,’ said Matthias Schulgen, Healthcare Portfolio Manager, Corpus Sireo Real Estate. 

‘Healthcare is becoming a mature investment market of significant size, so it’s very interesting’, said Ron van Bloois, Partner, HEVO. ‘Ticket sizes are increasing so we’re going from single asset deals to portfolio deals and now we’re talking about 100 mln deals. That’s very important for institutional investors because they like size’.

It is a trend that is visible across Europe: ‘It is not just specialist healthcare investors but also financially driven investors who are joining the market, attracted by long and stable lease contracts,’ said Schulgen. ‘There is strong demand for health care assets currently on the market’.

Senior housing is also attracting more interest from investors. In Germany, for example, in 2009 transaction volumes were E300 mln, while now they are over E2 bn.

‘It is a fast-growing asset class and interest from investors is growing by the day,’ said Alessandro Sparaco, Managing Partner, Threestones Capital. ‘In a nutshell, the attractiveness of senior housing is mainly driven by long-term cash flows for investors and it is not correlated to the economic cycle. This is quite unique in real estate and very attractive compared to commercial real estate’. 

Healthcare has the same advantage in investors’ eyes, said van Bloois: ‘It is a sector driven by demographic factors, rather than the economic cycles that drive the retail or office investment market and it offers a good risk/income ratio’.

On the real estate side, the trend is for the creation of hubs, Schulgen said: ‘We are seeing a lot of combined assets, with senior living, assisted living and nursing homes together and often a medical office building as well’.

This is a trend that has reached Italy, said Paola Delmonte, Chief Business Development Officer, CDP Investimenti: ‘We do mixed projects that combine people who need medical assistance with self-sufficient elderly people in assisted senior housing. We find that self-sufficient people benefit from having medical assistance nearby, as well as all the other services like sports and leisure activities’.


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