Icade, the big French REIT plans to launch a separate healthcare REIT. Meanwhile, BNP Real Estate Investments is close to buying the healthcare part of Fonciere des Murs.
Nathalie Palladitcheff, CFO at Icade, said that the plan was to grown the healthcare arm, set up in 2006, from €1.3bn to at least €2bn. But Francoise Delettre, Sante Icade indicated that the aim was to double its size. Once the fund reaches critical mass, Icade wants to float it off as the first specialist quoted healthcare REIT in France, that could be as early as 2014.
Gecina tried to do this last year with its Gecimed fund, but decided to pull the flotation. At €900m it lacked scale and was also overly dependent on a single large tenant, France’s largest hospital group, Generale de Sante.
Currently, Icade has six partners – national chains Generale de Sante, Vedici and Medi-Partenaires and three region players 3H, C2S and Hrapin.
Delettre says that so far she estimates that some €2.5-3bn of private hospital property has been entered into sales and leaseback and reckons there may be a further €12bn to follow – excluding small hospitals which have no interest.
She says that net yields stand at around 7% compared to 5.5-6.5% for prime office property in Paris. “Regional offices have higher yields, but higher risks. Hospitals look attractive as they have stable long term tenants. I see a lot of institutional appetite for this.”
Meanwhile, BNP Real Estate Investments with €13bn under management is buying assets worth around €70m from REIT Foncière des Murs which works with big operators of hotels, restaurants and healthcare. Foncière des Murs has some €423m of healthcare in its €3bn portfolio. Stephane Pichon from You Consult said: “It is significant that France’s largest bank is setting up a dedicated healthcare fund which will probably grow to at least several hundred million euros. It shows the appetite from institutional investors.”
Our Analysis: Gradually the property fund market is developing. However there is still relatively little appetite for Pan-European funds and given the degree to which healthcare regimes vary across Europe this is hardly surprising.
Source: Healthcare Europe / March 28th 2012