Overseas capital accounted for over 50% UK healthcare property market investment in 2021, according to Knight Frank.
The latest Knight Frank Healthcare Capital Markets report revealed that investment in the sector totalled £2.34bn in 2021, significantly above the five-year average of £1.5bn.
Overseas capital has significantly increased over the past five years, accounting for 51% of all transactions followed by REITS and private property companies each accounting for 19% and 18%, Knight Frank said.
This year, transactions totalled approximately £115m by mid-February, including PGIM’s acquisition of six care homes for around £70m and Allegra Care’s acquisition of two homes with a combined 133 beds.
Julian Evans, Head of Healthcare at Knight Frank, (pictured) commented: “We are seeing great growth potential for the UK healthcare property investment market, with the demand for best-in-class properties only set to increase as the population continues to age. As is typical across most sectors now, the properties with viable ESG credentials will be the ones which are most appealing to investors and sustainable in terms of the returns they can deliver.
“However, there are a number of headwinds around inflationary costs and supply chain issues in addition to staffing shortages and the industry is watching closely at how much support the imminent Social Care Levy will provide. Development remains essential to meeting future demand levels and currently quality stock availability is a significant barrier to this, so it is through further development that astute investors can enter the market and capitalise on the sector.”