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Healthcare investment to hit record levels in Q4, Knight Frank says

Julian Evans

UK healthcare investment volumes are set to hit record levels in Q4 despite COVID-19, according to Knight Frank.

The global property adviser said the quarter would see a number of prominent and high value deals, with investment in 2020 (£2.24bn) already above that seen in the whole of 2019 (£1.76bn).

Julian Evans, Head of Healthcare at Knight Frank, (pictured) said: “With a number of high-profile and large portfolios in the healthcare property market being brought to market, we are predicting record sales taking place in Q4 2020. There are currently two distinct investment silos: institutional capital is chasing social care fixed income such as real estate and private equity; and infrastructure funds are seeking specialist sector companies.”

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Deals in the pipeline for the quarter include England’s largest mental healthcare provider The Priory Group (£1.5bn), mental health services provider Elysium Healthcare (£900m), children’s care and education services provider Keys Group (£250m) in addition to another £3bn of specialist (mental health, learning disability) providers and £1bn of broader healthcare property transactions.

Julian added: “The COVID-19 pandemic has shone a light on the UK healthcare sector, both demonstrating the very best of the UK’s healthcare sector, with outstanding collaboration between the private sector, social care sector and NHS at this time of need, in addition to unfortunately highlighting the lack of investment by successive governments into the sector, and therefore the urgent need to prioritise preventative and crisis funding.

“As such, the investment appetite for healthcare real estate remains strong, both in more traditional assets such as care home developments as well as the increasingly popular mental health services sector. This demand is only strengthened by the limited supply within the healthcare market combined with the awareness of the ever-growing demographic fundamentals for these assets which are driving the sector. As a result, there will undoubtedly be a flight to quality as investors seek defensive healthcare assets and we anticipate that investment into the sector will continue to rise, from a broad church of domestic and overseas investors.”

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