CBRE have released their 2024 Healthcare report which summarises 2023 as the year of private capital with on a selection of notable transactions occurring in-light of institutional challenges and rising interest rates.

The report still demonstrates the undeniable demographic strength associated with healthcare investments along with the strength of consistent tenant performance. While the sector saw yield softening in 2023 the impact of this was far less prevalent than other core investment categories.

CBRE also acknowledge across all agencies there was an increased volume of trophy healthcare assets marketed in 2023 but many remain unsold due to struggles with capital raises and costs of debt.

Sandro Peluso said “The 2024 report really demonstrated the importance of private capital across high net wroth individuals and syndicates. The past 12 months and like the coming 6-12 months is really a window of opportunity for private capital to secure assets with reduced competition at an institutional level. While this may change rapidly, as of today our team have transacted two assets between $20-$45,000,000 in the past 3 months to private capital.

People continue to be surprised at the amount of equity in the market. These buyers require minimal to in some cases no debt and are willing to overlook short term cash rates challenges. The view is with reduced supply and future rate cuts forecasts the sector will again see yield compression in short order across late 2024 and early 2025.”

Marcello Caspani-Muto said “The leasing market across the sector remains a challenge so the value associated with established healthcare hubs with proven traffic flow cannot be understated. Minimal competing day surgeries and super clinics are in the pipeline nationally which also insulates the potential of long-term success and tenant retention. We see current conditions as a unique opportunity for investors to enter the market that may not be replicated for a long period of time.”

To request a copy of the CBRE 2024 Healthcare Report please contact one the CBRE agents below. 

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