Surging demand for traditional core property investments has resulted in an increased focus on ‘alternatives’ at this year’s market, the booming healthcare real estate sector among them. This sector includes hospitals, clinics and local general-practice doctors’ surgeries.
Research shows that about 15% of funds are now allocated to such non-core assets, with 90% of investors planning to increase allocations over the coming five years. However the national legal and cultural considerations can be quite specific in this sector, meaning a ‘one size fits all’ approach to investment is not appropriate.
Mirroring the increased exposure, this year’s MIPIM saw a number of dedicated healthcare events. These included Wednesday’s conference: European Healthcare Comes Of Age — Where International Capital And Demographics Align For Further Market Growth, sponsored by Corpus Sireo, part of Swiss Life.
Further conferences, a flashmob networking event and a cocktail party sponsored by Healthcare REIT completed the programme.
According to Corpus Sireo managing director, Douglas Edwards, interest in the healthcare property market is growing across northern Europe. Factors behind this include the ageing population and rising expenditure on healthcare in general. “This means healthcare property shows very low volatility — it’s more like an annuity investment,” he said.
Research by specialist healthcare and real estate financial advisor, Your Care Consult, found that €1.4bn of healthcare transactions were completed in Europe last year. According to the research Germany has the largest market in Europe, worth €1.5bn in 2014, followed by the UK where £1.2bn (€1.7bn) of transactions took place.
This trend was also touched on by the head of the British Property Federation, Melanie Leech. She said that a number of alternative sectors were proving strong returns for investors with healthcare becoming increasingly open, driven by the need to create integrated health and social care facilities as part of long-term reforms of the UK health service.
However, activity is much lower in southern Europe compared to countries in the north. Research shows that countries such as Spain and Italy have lower potential due to historically low investment volumes and demand.
Read more from the MIPIM Review 2015
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