Investors see a future in healthcare real estate. The growing interest is due not only to a flourishing economy, but also and above all to the reduced risks of investing in healthcare property. For example, government influence on healthcare used to be greater, which often resulted in uncertainty about changes in laws and regulations. The new generation of elderly people is becoming less dependent on the government because of their better financial position. In addition, healthcare institutions are also in a better financial position than before and, as tenants, they are gaining the confidence of property owners.
Increasing capital position of the elderly
The new generation of older people is becoming less dependent on the government because of their better financial position. They are considerably wealthier than the current generation of older people. As a result, they are less dependent on public money to obtain care. Future elderly people will have more wealth mainly through their own home ownership. With a decreasing care budget from the government, their self-sufficiency is better and there is less influence on the demand for care. It is even possible that more elderly people sell their homes and rent them to make money available for care. This way they can influence the way they receive care. This means a different type of care need in the future and an expected increased demand for care in private care complexes.
Care sector increasingly healthy financially
In addition, healthcare institutions are also in a better financial position than before and, as tenants, they gain the confidence of property owners. Despite the limited profit margins, there is a stable basis with increasing resilience. This capital is far above the 15% limit, which the Guarantee Fund for Care considers to be healthy. The development of solvency is along the same lines. This ensures that healthcare institutions are increasingly seen as a solid tenant.
Increasingly higher price for healthcare real estate
Because investors see less and less risk, the number of parties looking for investment opportunities is also rising sharply. The result of rising demand is an increase in the prices paid for health care property. Gross initial yields are falling for both extramural and intra-mural health care properties and in line with the trend line of the housing market. The gross initial yield of the best extramural health care property fell to 4.35% and that of intramural health care property to 5.2%.