Investment into healthcare property is forecast to rise in 2024 amid a continued ‘flight to safety’ and demand for secure long-term income, according to new research from Knight Frank. 

Knight Frank’s Healthcare Capital Markets 2024 report shows that investment into healthcare assets totalled £1.2bn in 2023, down 49% y-o-y (from £2.36bn) in line with other real estate sectors as the increasing cost of debt impacted pricing and sentiment. Almost half (48%) of transactions were single asset deals, compared with 28% in 2022, with overseas buyers less active, accounting for 25% of volumes compared with a five-year average of 48%. 

However, with monetary policy expected to ease in the second half of 2024, Knight Frank is forecasting an increase in investment volumes underpinned by the sector’s strong fundamentals. 

The majority of UK healthcare investment has been focused on elderly care facilities (83% of volumes in 2023) and demand for these facilities is set to increase dramatically with the UK’s over-85 population set to rise from 1.7m to 3.7m by 2050. 

Julian Evans, global head of healthcare at Knight Frank, said: “While healthcare investment was down in 2023 in line with real estate transactions globally, the sector’s strong fundamentals means we expect activity to rebound this year as monetary policy begins to ease."