- Transaction volume of €330 million in the 3rd quarter of 2024
- Prime yields for care homes remain at 5.10 per cent and for assisted living at 4.50 per cent
- Classic large-volume transactions remain absent
Cushman & Wakefield, one of the world's largest real estate consultancies, recorded sales of over EUR 330 million on the German healthcare property market in the third quarter of 2024. This is 80 per cent more than in the same period of the previous year (EUR 185 million).
No large-volume transactions
The transaction volume reached over EUR 330 million in Q3 2024, with the Inpatient Medical Care segment accounting for the lion's share at more than EUR 240 million. Nursing homes accounted for around EUR 65 million and assisted living for around EUR 26 million. The majority takeover of the VAMED Postakut business, which included rehabilitation clinics and care properties, by PAI was the deal with the highest turnover in the third quarter.
After nine months, the transaction volume recorded in the healthcare property market this year amounts to EUR 590 million. This figure is around 30 per cent below that of the same period last year.
Prime yields remain stable
The prime yield for care homes in Germany remained unchanged at 5.10 per cent in the third quarter of 2024. There was also no movement for senior residences for assisted living and the value was 4.50 per cent, as in the previous quarter. The prime yield for outpatient medical care facilities (MVZs) stood at 4.75 per cent and for inpatient medical care facilities (clinics) at 5.75 per cent.
Operator market still characterised by takeovers
‘More difficult refinancing options in the face of increased costs in the care sector have had a negative impact on the profitability and stability of healthcare property operators across the board since 2023. These effects can still be seen in the key operating figures. It therefore remains important to obtain a clear picture of the business situation at an operational level in order to achieve the greatest possible security for long-term sustainable investments,’ explains Jan-Bastian Knod, Head of Healthcare Advisory at Cushman & Wakefield.
German healthcare property in the interest of international capital sources
Healthcare property continues to be the focus of alternative investment strategies for institutional investors. Cushman & Wakefield therefore anticipates an increase in transaction volume for 2024 as a whole compared to 2023. ‘Foreign sources of capital in particular see opportunities for long-term sustainable investments in this asset class and also provide liquidity for large-volume transactions. A lot of liquidity for investments can be seen in the asset classes of assisted living, medical care facilities and rehabilitation clinics, suggesting a year-end rally,’ summarises Jan-Bastian Knod.
