There was huge interest in healthcare as an asset class at Mipim, the big international conference for institutional property investors held in Cannes, according to Stephane Pichon, CEO of French consultancy Your Care Consult, who ran a session on the subject, comparing yields on healthcare to retail and office.
Pichon said: “The room was crammed – we had over 100 people.”
Pichon’s presentation focused on how investors could move into the class from retail and office property. He points to Confinimmo which is now targetting 50% of its real estate portfolio in healthcare with EUR1bn in Belgium and France which is now looking at Italy and Germany as well. He says Catella AG is also running a real estate fund. Having bought in Germany it is now targeting Italy and France.
He estimates there is €300bn of inventory in healthcare across Europe with just €4bn in property transactions a year.
In France he estimates that, despite compression, the yield premium of healthcare over office and retail which was 300 basis points in 2005 and 200 bps in early 2006, was probably hovering around 100 bps in 2009. But he points out that Gecimed, in its latest EUR239m deal for 31 homes achieved 6.35% which he says is still 200bps over prime office in Paris.
Source: Healthcare Europe / March 10th 2011