UK healthcare real estate transactions reached £3.2bn in 2024, the highest figure seen since 2020, according to new data from Knight Frank.
Elderly care accounted for 68% of total transactions, private hospitals accounted for 29% and the final 3% comprised adult specialist care, primary care and childcare assets.
Demand from overseas capital reached 52.5% last year with US-based REITs and private equity groups accounting for 66% of global flows into UK healthcare compared with 34% from the EU. Portfolio deals accounted for 85% of transactions compared with 52% in 2023.
Average annualised returns sat at 5.8% at the end of Q4 24, up from 4.4% in the previous period.
Julian Evans, global head of healthcare at Knight Frank, said: “Healthcare’s fundamental drivers, such as demographics, long-term income, and ESG credentials, have and continue to present an undeniable investment case. On this basis, the overall outlook for the healthcare sector is optimistic and we have already seen last year’s positive sentiment filter through into 2025 with the completion of large portfolio as well as M&A deals.”
Ryan Richards, associate at Knight Frank, added: “The surge of demand for UK healthcare property is underlined by a revival in M&A activity, with primary care REIT Assura a target acquisition for private equity giant KKR as well as rival REIT PHP. Beyond this, US-based Care Trust has acquired Care REIT as well as recent news of a proposed merger between Aedifica and Cofinnimo which would create the fourth largest healthcare REIT globally. It is clear that many investors wish to build scale quickly in a sector that is highly granular but underpinned by long-term structural trends.”
