Insights from the Investors in Healthcare Real Assets Conference

Compass Carter Osborne partnered with Investors in Healthcare to deliver their inaugural Real Assets Conference, a one-day European event focused on healthcare real assets across property and provider sectors.

The conference examined the rapidly evolving healthcare market, highlighting the emergence of pan-European healthcare infrastructure assets underpinned by their social infrastructure characteristics. It also explored the growing convergence of real estate and operations, with particular emphasis on the importance of understanding the covenant strength of the underlying operating businesses responsible for rental income.

Key takeaways 

• 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐇𝐞𝐚𝐥𝐭𝐡𝐜𝐚𝐫𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 is showing renewed momentum, underpinned by returning deal flow, operator recovery and continued evidence of strong risk-adjusted returns.
• 𝐓𝐡𝐞 𝐂𝐨𝐧𝐭𝐢𝐧𝐞𝐧𝐭𝐚𝐥 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐨𝐮𝐭𝐥𝐨𝐨𝐤 𝐢𝐬 𝐢𝐦𝐩𝐫𝐨𝐯𝐢𝐧𝐠, although opportunities are highly differentiated by country and sub-sector. Spain and Southern Europe are attracting more positive sentiment, while France and Germany may appeal to investors pursuing opportunistic acquisition strategies.
• 𝐂𝐚𝐫𝐞 𝐇𝐨𝐦𝐞𝐬 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞 𝐭𝐨 𝐛𝐞 𝐚 𝐭𝐨𝐩 𝐜𝐡𝐨𝐢𝐜𝐞 for investors given the sector’s maturity and scalability across most European markets. There was also clear interest around Medical Office Buildings, alongside Mental Health Hospitals, particularly in markets where broader Healthcare real estate sub-sectors are more constrained.
• 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐜𝐨𝐧𝐭𝐫𝐚𝐜𝐭𝐬 𝐚𝐧𝐝 𝐑𝐈𝐃𝐄𝐀 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞𝐬 were a central theme, with investors divided between capturing operational upside and prioritising income certainty through triple-net leases, a debate brought about by recent US platform acquisitions in the UK.
• 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 𝐢𝐬 𝐞𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐚𝐬 𝐚 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐭𝐢𝐚𝐭𝐨𝐫, with US REITs trading at premiums to net asset value able to deploy equity capital, giving them greater balance-sheet flexibility and growth capacity than most European peers.

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