HEALTHCARE

Keypoints

  • Limited recovery in investment volumes
  • Further compression of initial yields
  • Reflection on the Woontop: Healthcare real estate and housing for the elderly
  • Development of senior housing still slow
  • Financial recovery at healthcare institutions, but investments lag behind

Limited recovery in investment volumes

The investment volume in Q4 2024 amounted to €267 million, similar to Q4 2023. The cumulative annual investment volume reached €724 million, a modest increase compared to 2023. However, this level is significantly lower than the 2019–2022 period, when annual volumes ranged between €1.1 billion and €1.4 billion.

In 2024, the private nursing segment maintained a strong presence in healthcare real estate. Investments in primary care centers also grew significantly, while the volume in institutional care facilities was notably lower. This trend reflects differences in per-project investment sizes rather than a shift in preferences. Larger senior care complexes faced financing challenges, partly due to restrictions in the financial market. In contrast, private nursing care and health centers offered smaller, more manageable investment sizes, appealing to a broader range of investors.

INVESTMENT VOLUME HEALTHCARE (€ BILLION)

Source: CBRE (2015-2018), Capital Value (2019-2025), edited by Achmea Real Estate

SHARE INVESTMENT VOLUME HEALTHCARE BY SEGMENT (%)

Source: Capital Value (2025), edited by Achmea Real Estate

Yield compression continues

Initial yields for premium extramural and private nursing care real estate continued to compress in Q4 2024. Indexed rental levels and stable to slightly compressed yields positively impacted healthcare real estate returns. According to the MSCI Netherlands Quarterly Property Index, total returns—combining direct rental income and indirect valuation gains— further improved in Q3 2024, placing healthcare real estate alongside residential properties as top-performing segments.

YIELDSHIFT Q4 2024 (%-POINT)

Source: Capital Value (2025), edited by Achmea Real Estate

TOTAL RETURN (%, ANNUALISED Q3 2024)

Source: MSCI Netherlands Quarterly Property Index (Unfrozen) (2025)

Reflection on the Woontop: Healthcare real estate and senior housing

During the Woontop in December 2024, ambitious agreements were made to accelerate housing production to 100,000 units per year, two-thirds of which must be affordable. Healthcare and senior housing were given a more prominent place in the plans, aiming to finalize agreements on building 288,000 senior homes by 2025. The Ministry of Health, Welfare, and Sport is assessing the need for nursing home beds and how these can be integrated into broader housing goals. Waiting lists for institutional nursing care remain high. Conceptual and industrial construction methods are being encouraged to enable faster and more efficient realization of affordable and care-suitable housing. National construction standards are being harmonized to promote standardization and innovation. Additionally, an incentive scheme is being introduced to support specific types of care housing, such as clustered living arrangements, to offset higher costs and attract investment.

Image: © Robin Utrecht

Senior housing development still slow

The demand for senior housing is substantial, with an estimated need for 407,000 homes by 2040 (source: ABF Research). However, realization remains slow due to a lack of clear municipal mandates, despite government targets to build thousands of life-cycle homes annually. In 2023, only 1,700 new care homes were completed (source: Capital Value), and 2024 is expected to reach approximately 2,800 (source: ABN Amro). Future construction plans also show limited improvement. Research by CBRE indicates that, even internationally, the Netherlands lags behind in developing sufficient and suitable housing for seniors. They suggest focusing more on well-being rather than care, emphasizing self-reliance and appropriate housing. Finland serves as an example. The lack of suitable housing hinders market mobility and increases pressure on the healthcare sector. In practice, municipalities often prioritize affordable and starter homes, while senior housing remains financially less attractive to many investors and developers due to complexity and higher costs. The focus on proximity to facilities, high construction costs, and additional requirements makes care-related projects difficult to realize, leaving supply lagging behind growing demand.

WAITING FOR LONG-TERM CARE HOUSING (2020 Q3 = 100)

Source: Zorginstituut Nederland (2025), edited by Achmea Real Estate

Financial recovery at healthcare institutions, but investments lag

Since 2019, the financial position of healthcare institutions has improved, with increased solvency, creditworthiness, and profit margins. However, the declining EBITDA margin—from 7.1% in 2019 to 5.9% in 2023—limits investment capacity (source: Gupta Strategists). This hampers maintenance, sustainability improvements, and new construction. Healthcare organizations recorded better results in 2023, partly due to incidental windfalls such as subsidies and retroactive indexations (source: EY). However, the rising costs of hiring self-employed workers remain a significant expense. The decline in investments—from 5.7% to 4.3% of revenue between 2019 and 2023— highlights the sector's vulnerability (source: Gupta Strategists). Larger healthcare providers, in particular, are investing less, leading to deferred maintenance and risks for property and sustainability. Without structural improvements in financing and cost control, futureproof healthcare infrastructure is at risk. Institutional investors, alongside governments and banks, could play a vital role in addressing this gap.

HEALTHCARE BANKTRUPTCIES (2 QUARTER MOVING AVERAGE)

Source: CBS (2025), edited by Achmea Real Estate

Outlook

The second half of 2024 was characterized by a cautious recovery in the healthcare real estate investment market, a trend expected to continue into 2025. Declining initial yields and recovering valuations offer renewed opportunities for investors who have been less active over the past two years. While healthcare real estate remains an attractive sector, suitable investment opportunities are still scarce. The financial business case for new healthcare real estate faces strong competition from the residential market. Planning must incorporate the increasing demand for healthcarerelated housing into actionable projects. Traditional residential investors are increasingly interested in incorporating senior and life-cycle homes into their portfolios. Given the growing demand for clustered living with care options, this offers a promising investment boost for the medium term.

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