Healthcare

In 2024, the investment volume in healthcare real estate amounted to €620 million, an increase of 24% compared to 2023. This was mainly because more large portfolio transactions returned – of both new and existing properties. Nevertheless, investment activity lags. Think of a limited supply of both existing and new construction and a mismatch between buyer and seller. CBRE expects an increase in investment activity in the coming years, with a volume of €700 to €900 million in 2025. Developers are responding to the increasing demand for healthcare real estate, from senior living to health centres. In addition, healthcare providers are more critical of their role in real estate and the required real estate investments, and investors – from family offices and private equity parties to institutes – are strengthening their interest and growth ambition in this sector.

Trends and developments

• Healthcare organisations can no longer postpone investments in sustainability, transformation or redevelopment of existing healthcare real estate and are looking for professional real estate partners. The investment capacity from the healthcare sector is decreasing rather than increasing: on the one hand because of the separation of care and housing, and on the other hand because of announced government cutbacks. In addition, healthcare organisations are making targeted choices within their portfolio strategy and are increasingly focusing on investments in their core assets – the real estate that is crucial for the operational continuity of care. This is in line with the expectation that more existing and outdated healthcare real estate will be disposed of in 2025, resulting in more value-add products that developers or developing investors will start working on. This is on top of the required investment in new construction and the expansion of 288,000 care homes, as proposed by the government in December 2024.
  
  
• Within senior living and assisted living, a transition is taking place from master lease to individual rental of independent apartments. Healthcare organisations focus on the care and services provided to residents, while real estate risks and returns lie with the real estate owner. This shift also attracts a broader group of investors, due to the strong similarities with residential real estate under an individual rental structure. Moreover, given the enormous ageing population, it constitutes a solid and future-proof investment category. Incidentally, the master lease segment will remain to exist, especially in places where (24-hour) care is particularly important, such as private and intramural residential care.
  
  
• Due to the strong population growth, the demand for first line and second line care is continuously growing. As a result, domestic and foreign investors are looking with increasing interest at the cure segment of healthcare real estate: think of clinics and health centres. They have gradually invested in this segment in recent years, creating some larger portfolios. CBRE expects investors to launch more of these types of portfolios in the next two years. This will also make it possible for foreign parties to enter the Dutch market via a portfolio acquisition with scale.

Analysis of healthcare

In order to meet the increasing demand for care and stricter quality requirements, with an eye on sustainability and the climate-neutral goals for 2050, an average investment of approximately €25 billion per five years is needed in the residential care sector, or an average of approximately € 5 billion per year. These investments are essential for the growth, modernisation, and sustainability of care homes. 86% of this must go to quantity (i.e. the addition of housing units), the remainder is needed for sustainability and other quality improvements of the existing stock. At the same time, it appears that more than 18%^[11] of the healthcare organisations will not be financially able to keep their real estate operations healthy and to make the necessary investments in sustainability, replacement and/or expansion. This situation underlines the urgent need for additional capital and investment capacity.