HEALTHCARE

Keypoints

  • Investment volume recovery lags, hopeful for second half of 2025
  • Initial yields remain under pressure
  • Total return on healthcare real estate investments heading for double digits
  • Building for the elderly as key to movement in the housing market
  • Primary care real estate: necessary infrastructure with ageing population

Investment volume recovery lags, hopeful for second half of 2025

Investment volume in the first half of 2025 amounted to €268 million. This leaves the volume behind the same period in 2024. The expected recovery in investment activity in the second quarter did not materialise. Nevertheless, we still expect a rebound in the rest of 2025 and early 2026, when the transfer tax reduction takes effect.

Brokers and advisers are now also signalling increasing investment activity, from both private and institutional investors. As previously announced, falling funding rates are also causing buyers who do not finance entirely with equity to return to the market. This explains why the share of private investors and real estate funds in investment volume in the first half of this year is significantly higher, both in absolute and relative terms, than in the same period last year. In 2024, they were still precisely the biggest sellers of healthcare real estate. It is precisely institutional investors that are lagging in their investment activity this quarter.

The share of foreign investors in the investment volume remains negligible in 2025 for now. New construction and existing construction are roughly evenly split in the first half of this year. For investors, intramural and private residential care real estate remain particularly interesting.

INVESTMENT VOLUME (BILLION €)

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

SHARE INVESTMENT VOLUME

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

Initial yields remain under pressure

Top initial yields are still under stable to slight downward pressure, according to figures from Capital Value. In the second quarter in particular, top initial yields for second-line care were revised downwards further. Cushman & Wakefield signals a decline in top initial yields in private and inpatient residential care.

The pressure on initial yields is closely linked to falling funding rates. According to Oxford Economics, these funding rates could fall further towards early 2026, while long-term interest rates are more stable and remain closer to current levels. This increases competition between different types of property investors, resulting in continued pressure on initial yields.

However, given the increasingly narrow spreads between interest rates and initial yields, a further sharp decline of yields is not logical. As investment volume picks up and more transaction references become available, the reliability of yield levels will improve.

YIELDSHIFT Q2-2025 (%-POINT)

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

Total return on healthcare real estate investments in double digits

In Q2 2025, the MSCI Quarterly Index showed positive total returns across all property segments. Healthcare real estate realised annualised (four quarters) returns of over 10.5 per cent. As with residential properties, extramural care real estate clearly benefited from positive capital growth, driven by rising real estate valuations - a development that was also visible in second-quarter valuations.

Market rents within healthcare real estate continue to develop steadily. In the private rental sector, rent increases are relatively strong, partly due to the limited supply and the restrictions from the Affordable Rent Act for the middle segment. For intramural care real estate, the indexation of the normative housing component is having a positive effect. The relatively high level of inflation (around 3.5 per cent at the end of Q2) also affects contract and market rents of curative properties.

Combined with the pressure on initial yields, annualised total returns are expected to remain at high levels in the coming quarter as well. Healthcare real estate is also proving its value in the longer term. With total returns above 7 per cent and lower volatility than residential investments, for example, it is an attractive segment. For investors aiming for a favourable Sharpe ratio, healthcare real estate is performing particularly well.

RETURN, VOLATILITY AND SHARPE RATIO (2012-2025)

Source: MSCI Netherlands Quarterly Property Index (2025), edited by Achmea Real Estate

Building for the elderly as key to movement in the housing market

The housing market is locked in, while ageing is increasing. Older people are a key to movement, but their willingness to move is decreasing due to lack of suitable supply. Especially life-proof rental flats in their own neighbourhood are scarce. According to the WoON2024 survey, 40 per cent of households are now single-person households, many of them 65-plus. Only 8 per cent of these older households are considering a care home; 90 per cent opt for independent living with care nearby (ANBO-PCOB, May 2025).

Stec Group shows that senior housing triggers the longest moving chains - four to five steps on average - and thus smooths the housing market. NVM therefore calls building for seniors a strategic key. Yet production lags behind: only 1,000 new care homes were built in 2024, compared to a need of 35,000 per year (Capital Value, April 2025). The Court of Audit notes that municipalities operate slowly and piecemeal, despite available central government funding.

Due to the shortage, more and more over-55s are remodelling their current homes. According to De Hypotheker, mortgage applications for home improvement in this group increased by 115 per cent in Q1 2025. This underlines that many older people are staying put for lack of alternatives. As a result, the flow of housing stalls: family homes remain occupied and first-time buyers find it difficult to get in. One link is missing: the right supply for seniors.

Market and government recognise the need. Policy-wise, pressure is growing: the Ministry of Health, Welfare and Sport is investigating a modern version of the care home, in response to structural care bottlenecks such as hospital admissions and waiting lists. At the same time, research by ANBO-PCOB shows that the elderly themselves are hardly in favour: they explicitly choose independent living with privacy, care on demand and social safety. However, municipalities are increasingly including care housing in area development plans. There is also movement from the institutional investment world.

More and more investors recognise the strategic importance of senior housing and are exploring opportunities to invest in it. Yet they too are being held back by limited supply, lack of municipal programming and lengthy procedures. Although Dutch pension funds have set aside €12.7 billion for rental housing (Capital Value), realising suitable projects is proving complex. Several investors are nevertheless actively pursuing life-course-proof housing concepts.

According to Achmea Real Estate, the housing preferences of seniors demand contemporary forms of living that combine privacy, security and meeting. These include courtyards or clustered appartments with shared facilities. Here, senior housing is barrier-free and suitable for light support and care housing offers space for heavier care at home. Both types are crucial for longer independent living and a better functioning housing market.

First-line healthcare real estate: necessary infrastructure with ageing population

By 2035, 43 per cent of the Dutch population is expected to be 65 or older. At the same time, the number of people with one or more chronic conditions will increase to over 11 million. General practitioner care will absorb most of this growing demand for care, but is itself facing a rising staff shortage of over 7,900 professionals (Vision GP Care 2035). In addition, the potential of informal carers is halving and the need for care close to home is growing.

Against this backdrop, the need for well-facilitated primary care locations is growing. Health centres and integrated residential care complexes are crucial links in the care network, especially in ageing neighbourhoods. Yet the supply of suitable healthcare real estate lags behind the social task. Our own research shows that curative care real estate - such as centres for GP care, diagnostics and treatment - not only adds social value, but is also attractive from an investment perspective. Long-term leases with healthcare providers create stable cash flows, low vacancy rates and a differentiated risk profile. For institutional investors, this segment offers the opportunity to actively contribute to the solution of a structural issue, with returns and impact.

Outlook

The structural recovery of the investment market is taking longer than previously expected. At the same time, underlying conditions remain favourable. The strong user market, stable rental levels and the long-term perspective offer investors the prospect of sustainable value development - which is also reflected in current investment returns. Investment activity and willingness is increasing among various types of investors, although limited supply remains an inhibiting factor. Market dynamics are additionally affected by the prospect of a lower transfer tax in 2026, which may lead to the postponement of transactions. Initial yields remain under moderate downward pressure, with room for slight compression in some segments. At the same time, the narrowing yield spread limits the scope for further sharp declines.

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