A New Way To Invest In Commercial Property
Discover the benefits of pooling resources to access institutional- grade property in a Single Asset Fund.
For high net worth individuals and families, preserving wealth is a primary concern. Persistent inflation diminishes the purchasing power of traditional investments, making it essential to explore assets that offer robust inflation protection. Healthcare real estate stands out as a compelling solution – a uniquely resilient asset class designed to withstand economic uncertainties and provide a secure foundation for wealth.
As inflation continues to challenge conventional investment strategies, the question arises: how can your portfolio maintain its real value through 2025 and beyond?
Inflation’s impact on the UK economy remains significant, exerting considerable pressure on investment portfolios. Current projections suggest that UK inflation is likely to remain above the Bank of England’s 2% target throughout 2025, potentially reaching 3.5% later in the year [1]. This sustained inflationary environment reduces the real returns from standard investments like cash and fixed-income assets.
Adding to this complexity, the Bank of England’s cautious approach to interest rate adjustments means borrowing costs remain elevated, further squeezing investment returns. For astute investors, identifying assets that are resilient to inflation is not just advisable, but crucial.
Specific inflationary pressures are directly influencing healthcare real estate. Rising costs for construction materials and healthcare operations are reshaping the sector’s investment landscape. Interestingly, energy-efficient properties are demonstrating superior financial performance.
Data indicates that energy-efficient properties achieved a total return of 16.2%, significantly outperforming the 11.2% return of less efficient counterparts [2]. This highlights the growing importance of energy efficiency and operational costs in assessing healthcare real estate investments.
"Healthcare real estate is a key asset class in times of inflation due to its stable, long-term income streams and essential service nature. Demographic trends such as the aging population only bolster its enduring appeal for investors." - [Source: PWC Real Estate Report, 2023]
Healthcare real estate distinguishes itself as a remarkably stable asset class, maintaining its value even during economic instability. The demand for healthcare services remains consistent, regardless of economic cycles. Demographic trends, particularly the UK’s ageing population, underpin long-term sector expansion, making healthcare properties particularly appealing for those prioritising portfolio security.
By 2072, it’s projected that 27% of the UK population will be aged 65 or over, further increasing the need for senior housing and specialist care facilities [3].
The UK care home sector, for example, is currently facing a significant staffing shortage with 131,000 vacancies [4]. While operational challenges exist, the fundamental demand for care facilities continues to rise, presenting opportunities for well-managed healthcare properties with strong financial backing.
Investing in this essential infrastructure, supported by compelling demographic trends, offers a robust defence against broader market volatility.
A key feature of healthcare real estate investment is the prevalence of inflation-linked leases, especially in properties leased to NHS trusts and other healthcare providers. These leases typically include rent reviews linked to inflation indices, creating a natural hedge against rising prices. This mechanism ensures that rental income retains its real value over time—a vital advantage for investors protecting wealth from inflation.
Long-term leases, often extending to 30 years or more, are common in Single Asset Funds focused on healthcare real estate, providing predictable income streams.
NHS property leases are intentionally structured to provide inflation-linked income, crucial for the financial stability of the NHS estate [5]. With UK inflation expected to remain above target in 2025, these contractual rent increases offer automatic adjustments that help maintain the real value of income.
This is a significant advantage over many commercial property sectors where rental growth may struggle to keep pace with inflation, leading to reduced real returns. Consider a Single Asset Fund focused on a GP surgery in Greater Manchester. With a 25-year lease to an NHS trust and annual RPI-linked rent reviews, it delivers a 7.2% income yield, maintaining its real value even when inflation reached 11.1% in October 2022. In contrast, comparable commercial property yields have declined in real terms.
The UK is experiencing substantial investment in new healthcare infrastructure, creating strategic opportunities to invest in purpose-built medical facilities with reliable tenants. From GP surgeries to specialist rehabilitation centres, these developments are essential community assets with long-term viability and stable income potential.
For investors focused on inflation protection, this presents a compelling entry point into healthcare real estate. The UK government’s £15 billion New Hospital Programme demonstrates this commitment, prioritising sites affected by RAAC for redevelopment across three construction phases until 2039 [6].
For example, the UK’s first NHS National Rehabilitation Centre near Loughborough is currently under construction with a budget of £105 million [7]. These investments highlight the government’s dedication to expanding and modernising healthcare facilities nationwide.
Adaptive reuse of existing commercial properties is also gaining momentum, driven by the demand for healthcare space and the availability of underutilised commercial real estate. Energy-efficient conversions are particularly favoured, aligning with sustainability objectives and offering stronger financial performance [2].
In London, adaptive reuse projects are underway, such as the redevelopment of Moorfields Eye Hospital at St Pancras Hospital, transforming existing facilities to better serve community healthcare needs [8].
"Real assets such as infrastructure and property often serve as effective hedges against persistent inflationary pressures due to their tangible nature and ability to generate income linked directly to price indices." - Andrew Bailey
In a recent move to further support energy efficiency in healthcare, the UK government launched a £200 million investment in solar and renewable energy projects across NHS sites. Published just yesterday, this initiative, in collaboration with Great British Energy, aims to instal rooftop solar panels and other renewable energy solutions, projected to save the NHS up to £400 million over 30 years [9].
Dorset HealthCare, for example, has received nearly £1 million to instal solar panels and battery storage, expected to cut carbon emissions by 80% by 2030 [10]. These initiatives underscore the increasing government support for sustainable healthcare infrastructure, potentially mitigating regulatory risks associated with energy performance standards.
While healthcare real estate offers significant inflation-hedging benefits, it’s important to acknowledge potential risks, particularly within Single Asset Fund (SAF) structures. Key risks to consider include:
Effective risk management, as advised by the Royal Institution of Chartered Surveyors, remains essential. A robust due diligence framework is crucial when evaluating healthcare real estate opportunities. Key metrics for HNWIs to assess include lease covenant strength ratings, location demographics analysis, and energy efficiency ratings impact on valuation.
For example, lease agreements with NHS Trusts offer strong covenant strength due to government backing. Location analysis should focus on areas with growing elderly populations and limited existing healthcare facilities to ensure sustained demand. Properties with high energy efficiency ratings not only reduce operational costs but also enhance long-term value and appeal to tenants.
In an inflationary environment, distinguishing between nominal and real returns is crucial when assessing investment performance. Healthcare real estate has consistently excelled in preserving real returns compared to many other property sectors. Its inflation-linked income and essential service nature act as a buffer against the erosion of investment value seen in broader property markets.
Sector income growth has outpaced CPI by over 1% annually over the last decade, confirming the asset class’s resilience [12].
For instance, UK house prices have nominally increased by 51.8% since 2014, but after inflation adjustment, this growth diminishes to just 12.1% [13]. This stark contrast highlights the critical need for inflation protection in real estate investments.
Healthcare properties, with their long-term leases and inflation-linked rent reviews, are designed to maintain the real value of both income and capital, offering a distinct advantage during inflationary periods.
Institutional investors have long recognised healthcare real estate as a strategic portfolio component, especially during inflationary periods. Examining their investment strategies offers valuable insights for individuals seeking effective wealth preservation and growth.
Partners Capital, for example, allocated $1 billion of an endowment fund into health infrastructure-focused private debt instruments, outperforming traditional 60/40 portfolios by 18% during 2022 market volatility [14]. Real Asset Management (RAM) increased its healthcare exposure from 50% to 80% of its portfolio, achieving consistent occupancy rates above 90%, compared to sub-75% averages in retail and commercial holdings [15].
These examples illustrate a broader trend: institutional capital is strategically shifting towards healthcare real estate to capitalise on its defensive qualities and inflation-protected income streams. This trend is further supported by the increasing adoption of AI in real estate for enhanced data analysis and operational efficiency [16].
AI-driven predictive analytics are now being used to forecast financial trends and inform investment decisions, particularly relevant for inflation hedging. These tools analyse vast datasets to provide accurate predictions and strategic planning for real estate investments.
In healthcare, AI is also transforming operations, enhancing efficiency and reducing costs through automation, which strengthens the profitability and stability of healthcare facilities, making them more attractive investments. This integration of AI allows for more informed decision-making and proactive management in response to market changes.
Access to premium NHS-linked assets is often dominated by these larger institutions. However, Single Asset Funds, particularly those offered by specialist firms like SIRE Capital Partners, are democratising access, allowing high net worth individuals to participate in this traditionally institutional-grade market.
For individuals seeking to invest in healthcare real estate as an inflation hedge, various investment structures offer different benefits regarding accessibility, control, and diversification. Options range from direct ownership of smaller medical facilities to investing in specialised healthcare REITs or private equity funds.
Real Estate Investment Trusts (REITs) are attractive due to their tax efficiency and consistent income streams. UK-based Primary Health Properties PLC (PHP) is a leading example, focusing on primary healthcare facilities with long-term, government-backed leases [17]. Specialist healthcare REITs in the UK are also increasingly leveraging blockchain technology to enhance transparency and investor access, providing a more secure and efficient framework for transactions and asset management.
Single Asset Funds (SAFs) offer a compelling avenue for individuals seeking direct access to institutional-grade healthcare real estate. SIRE provides such opportunities through SAFs, with minimum investments starting from £100,000, significantly lower than traditional entry points.
This structure allows investors to select specific assets, ensuring transparency and mitigating blind pool risks. SIRE’s SAFs typically feature long-term leases, often 30 years or more, with inflation-linked rental uplifts. Furthermore, SIRE has developed a streamlined, digitally-enabled onboarding process for SAF investors, significantly reducing typical delays. This efficient system ensures a smoother, faster investment experience, addressing potential inefficiencies in traditional investment processes.
While some might argue that SAFs lack diversification compared to broader property funds, strategic diversification in commercial real estate is about selecting the right assets. SAFs offer low-correlation diversification relative to stocks and traditional real estate funds, reducing the risks associated with pooled investment vehicles.
With long-term leases, inflation-linked rental uplifts, and essential service tenants, SIRE’s SAFs provide inherent security, aligning with wealth preservation goals. Managed by specialist teams with clinical oversight, SIRE Capital Partners’ SAFs offer a focused investment in carefully selected healthcare assets.
This model provides HNWIs access to institutional quality assets, overcoming the challenge of competition from larger institutions. Moreover, SIRE operates as an Appointed Representative of The Fund Incubator Limited, which is authorised and regulated by the Financial Conduct Authority (FCA), ensuring full compliance with FCA standards and offering secure and transparent investment structures.
Healthcare real estate presents a robust and strategic avenue for individuals to protect their wealth against persistent inflation in 2025. Its defensive attributes, inflation-linked income stream, and targeted investment opportunities make it a valuable addition to a diversified portfolio.
Compared to other inflation-hedging assets like gold, Treasury Inflation-Protected Securities (TIPS), and commodities, healthcare real estate offers a unique combination of income generation, capital appreciation potential, and lower volatility. For example, during periods of high inflation, healthcare real estate has historically demonstrated more stable returns and income growth compared to commodities, which can be highly volatile.
While TIPS offer inflation protection, their yields may be lower than the income yields achievable in healthcare real estate. Gold, often considered an inflation hedge, does not provide a regular income stream like healthcare properties.
To explore how healthcare real estate can strengthen your portfolio against inflation and secure stable, long-term returns, schedule a personalised consultation with SIRE. Our team of healthcare property specialists can provide a bespoke analysis of your current portfolio’s inflation resilience and identify strategic healthcare real estate opportunities aligned with your wealth preservation objectives.
Contact us today to take the first step towards inflation-proofing your investments and ensuring financial security through 2025 and beyond.
How is your current investment portfolio positioned to withstand persistent inflation through 2025? We invite you to discuss your inflation protection strategy with our healthcare real estate specialists.
At SIRE, we firmly believe that secure income real estate, particularly within the healthcare sector, presents a vital strategy for wealth preservation amidst persistent inflation. The current economic climate demands robust investment solutions, and healthcare property stands out due to its inherent resilience and essential nature. We have long championed the benefits of this asset class, recognising its capacity to deliver stable, inflation-protected returns. Our Single Asset Fund structure is specifically designed to provide discerning investors with transparent and direct access to these institutional-grade opportunities, ensuring they can effectively navigate the challenges posed by ongoing inflationary pressures.
For us, the compelling demographic trends and the critical need for healthcare infrastructure in the UK underscore the long-term strategic value of this sector. The prevalence of inflation-linked leases within healthcare real estate provides a natural and robust hedge against rising costs, safeguarding the real value of investment income. We are committed to providing our clients with access to meticulously selected healthcare assets, managed with specialist expertise and underpinned by rigorous due diligence. In our view, healthcare real estate is not merely a defensive play; it is a cornerstone for building and maintaining wealth in the current economic environment and for generations to come.
Patrick Ryan is a Principal and Co-founder at SIRE Capital Partners, working on Deal Origination and Asset Management. Patrick has spent 20 years in the property sector in London. His first foray into the sector was in 2003 when he co-founded a mezzanine finance business that focused on lending to property developers in and around London. Following this he headed up SIRE Properties, a healthcare focused asset management firm. Patrick has now co-founded SIRE that has expanded on his healthcare asset management focus to take in broader services to include brokerage and capital advisory.
[1] commonslibrary.parliament.uk/research-briefings/sn02792/
[2] cbre.co.uk/press-releases/sustainability-index-highlights-continued-stronger-financial-performance-for-efficient-properties
[3] committees.parliament.uk/committee/175/economic-affairs-committee/news/206022/preparing-for-an-ageing-society-inquiry-launched/
[4] vectorstore
[5] bankofengland.co.uk/monetary-policy-report/2025/march-2025
[6] gov.uk/government/collections/new-hospital-programme
[7] gov.uk/government/news/new-national-rehabilitation-centre-to-begin-construction
[8] hamhigh.co.uk/news/25027230.camden-planning-round-up-regents-park-sculpture/
[9] energylivenews.com/2025/03/24/gb-energy-to-cut-bills-for-hospitals-and-schools/
[10] blackmorevale.net/dorset-nhs-venues-handed-great-british-energy-cash-for-solar-panels/
[11] nrla.org.uk/news/the-uk-property-market-and-buy-to-let-in-2025
[12] sirecp.co.uk/asset-management/
[13] property118.com/uk-house-prices-up-12-1-in-a-decade-after-inflation/
[14] axios.com/2024/09/06/steward-massachusetts-hospitals-deal
[15] reuters.com/business/healthcare-pharmaceuticals/healthpeak-properties-raises-annual-ffo-estimate-steady-demand-2024-10-24/
[16] dev.to/jetthoughts/unlocking-the-future-custom-real-estate-software-development-in-2024-4ooc
[17] php.co.uk/
Discover the benefits of pooling resources to access institutional- grade property in a Single Asset Fund.
The UK healthcare market is rapidly evolving, presenting unique investment opportunities in real estate.
A Single Asset Fund is an arrangement whereby like-minded investors collectively allocate funds to invest in a commercial property.
Healthcare real estate offers stability and attractive yields amid economic uncertainty. With inflation-linked leases and government support, it’s a compelling choice for wealth preservation and dependable income.
UK healthcare real estate is evolving post-pandemic. Strategic insights reveal opportunities in specialised care facilities and tech-ready properties, offering resilient growth for discerning investors amid regulatory and economic shifts.
UK healthcare property offers stable, inflation-linked returns for investors. Benefit from government-backed leases, strategic regional investments, and tax-efficient structures. Secure income in a resilient sector with predictable demand.
UK healthcare property offers stable, inflation-linked returns with long-term leases and essential services demand. Explore this secure income opportunity amidst market uncertainty for reliable wealth preservation.
UK healthcare real estate is evolving with digital innovation and sustainability, offering secure, inflation-resistant returns. Strategic investments in this sector align with ESG principles and long-term growth.
Mastering the Corporate Transparency Act is crucial for UK healthcare property investors. Ensure compliance to avoid penalties, leverage private equity trends, and optimise investment structures for stable, long-term returns.
- Khalid Hussain (Clinical Director at Todays Dental Group)
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SIRE Capital Partners Limited is an Appointed Representative of The Fund Incubator Limited (FRN 208716) which is authorised and regulated by the Financial Conduct Authority
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