Global Healthcare Property 2022

Healthcare property includes any building that serves as a nursing home, acute care hospital, rehabilitation hospital, assisted living facility, adult congregate living facility, personal care facility, medical office building, or any healthcare facility. Any of the facilities may also include independent living units as a component of their overall structure.

Hospitals offer some outpatient and some inpatient medical, diagnostic, and treatment services. Facilities for nursing and residential care offer residential care together with any necessary nursing, supervision, or other types of care. The pharmaceutical sector creates, manufactures, and sells medicines that have been approved for use as drugs. The use of pharmaceuticals eliminates the necessity for invasive and inpatient care.

Europe 

According to the JLL’s European Healthcare Real Estate Interface, After a successful year in 2021 in the healthcare property sector in 2022, Q1 volumes in Europe reached over €3.7 billion. This was lower by 14% than in 2021, but higher by 33% than the 5-year average, with particularly excellent investment performance from the UK (1.2 billion euros) and Finland (660 million euros). According to recent historical trends, a slight increase over €1.8 billion (51 %) of this was spent on long-term nursing and care facilities.

France 

In France, there are 2,694 healthcare facilities, with 331 telemedicine projects, 494 public hospitals for emergency care, 39% private hospitals, and 36% private non-profit hospitals.

Icade, a market leader in healthcare real estate, has a portfolio with a complete consolidation value of €6.7 billion by the end of December 2021. Its 206 assets include acute, post-acute, and long-term care institutions, with 151 of them located in France and 55 in Germany, Italy, Spain, and Portugal (nursing homes).

The French assets of the Healthcare Property Investment Division are owned by Icade Santé, a 58.3% subsidiary of Icade. Those in other European nations are owned by Icade Healthcare Europe, a 59.39 % owned subsidiary of Icade.

Since 2018, the Group has followed an ambitious growth strategy that calls for an investment of €2.5 billion in France and internationally by 2022. This sum has already been invested to the tune of 60%.

To acknowledge, the PWC Health Industries 2022 Market study emphasizes the recent financial assistance provided by the French government since the issues regarding Covid began as well as the high cost of Covid-19 screen tests for reimbursement have helped to strengthen the resiliency of hospitals, facilities for the elderly, and medical testing labs. The PWC anticipates that activity in the medical testing laboratory sector will remain robust in 2022, while smaller-scale consolidation in the private hospital and medical nursing home sectors should also proceed. Additionally, they predict that the consolidation of veterinary clinics, dentistry clinics, and imaging centers will accelerate.

Germany 

Germany's healthcare real estate is growing increasingly relevant and in demand, with transaction volume expected to reach over 3.7 billion euros in 2021. 82% of investors have plans to invest in development projects or are already doing so. The full Healthcare Real Estate Investor Survey 2022 by Cushman & Wakefield offers additional relevant results.

"Healthcare real estate in Germany is more highly sought-after than ever before. The asset class has proven, especially during the Covid 19 pandemic, that it is crisis-resistant and a safe investment opportunity for investors. The number of players in the German healthcare real estate market has grown steadily in recent years, with many seeking access to the market." Jan-Bastian Knod, Partner, Head Residential Advisory and Head of Healthcare Advisory at Cushman & Wakefield. 

USA

According to a CBRE USA research, almost $25 billion in capital is anticipated to be invested in healthcare real estate this year. That would represent a significant increase from 2021, when the sector's transaction volume was just under $16 billion.

This year, buyers intend to flood the market in order to profit from the burgeoning industry. Only 14% of respondents said they planned to be net sellers in the market in 2022, compared to 84% who said they planned to be net purchasers.

99% of respondents who said the property type fulfilled their acquisition requirements were most interested in medical office buildings. Ambulatory surgery centers saw the highest increase from the previous year, rising by 17% from 2021.

Investor interest in healthcare real estate is being sparked by its stability. In a poll conducted by CBRE, almost all respondents said occupancy in their portfolio either remained the same or increased year over year in 2021. Only 6% of respondents mentioned a negative effect from COVID-19 in 2020.

Healthcare services (HCS) and pharmaceuticals and life sciences (PLS) maintained their high levels of investment interest in 2021. Many investors continue to find the industry particularly attractive despite increased economic confidence in many developed economies. 

While the consolidation of the private hospitals and medical nursing home sectors should continue, the PWC anticipates that it will happen on a lower scale in 2022. In contrast, they anticipate that M&A activity will remain robust in the medical testing laboratory segment. Additionally, we expect the consolidation of veterinary clinics, dentistry clinics, and imaging centers to gain momentum.

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