A New Way To Invest In Commercial Property
Discover the benefits of pooling resources to access institutional- grade property in a Single Asset Fund.
High-net-worth individuals and families seeking secure, income-generating assets are increasingly evaluating the merits of UK healthcare real estate. Understanding the underlying drivers of this sector’s stability, even amidst major market movements, is crucial for informed investment decisions. Let’s explore what makes this sector so robust right now.
In this analysis, we examine how demographic trends, institutional capital flows, ESG considerations, and innovative investment structures are creating resilient opportunities in UK healthcare property, even during significant market restructuring.
Despite substantial portfolio transactions and broader market adjustments, the UK healthcare property sector continues to exhibit remarkable resilience. Investment performance remains strong, underpinned by fundamental demographic trends and sustained institutional confidence. The essential nature of healthcare services provides a robust foundation for these assets, making them particularly appealing to investors seeking stable returns.
We saw significant investment volume in healthcare properties reaching £7 billion in 2024 alone through major transactions across various subsectors. This included substantial deals in care homes (£2 billion), primary care facilities (£1 billion), and mental health clinics (£800 million) [1]. This level of activity underscores the sector’s enduring appeal, even during periods when major portfolios are shifting hands.
The diversification across these subsectors highlights a mature market with multiple entry points for sophisticated capital.
For context, while retail properties experienced average yield compression of -1.2% in 2023 and office vacancies increased to 12.5% in major cities, healthcare assets maintained stable yields averaging 5.5-6.5% with vacancy rates below 3% [13, 18]. This comparative stability underscores the sector’s defensive characteristics.
The UK’s ageing population continues to be a fundamental driver of demand for healthcare facilities. This demographic trend provides a structural underpinning for property investments in this sector [1]. It presents a compelling long-term investment case for high-net-worth individuals seeking commercial property assets with sustainable occupier demand and inflation-resistant income characteristics.
NHS England projects a requirement for an additional +35,000 care home beds by 2030 [16]. This represents a substantial supply gap that will drive future development and investment. Mental health facilities also show exceptional rent growth (+6.5% pa) due to acute bed shortages, with only approximately 12,000 operational beds against an estimated need exceeding 25,000 [14, 16].
Demographic pressures could drive 40% rent growth in specialist care subsectors by 2035 [1, 12, 14]. These demographic-driven demand patterns create a compelling investment case largely decoupled from broader economic cycles, offering resilient returns even during periods of economic uncertainty or when other commercial property sectors face challenges.
Beyond the ageing population, the rise in lifestyle-linked diseases, such as diabetes and cardiovascular conditions, is increasing the need for specialised treatment facilities [38]. Furthermore, the UK is seeing a rise in economic inactivity due to long-term health issues, affecting 2.8 million people, which underscores the need for more healthcare services and facilities [40].
Despite growing demand, a shortage of healthcare professionals, including mental health practitioners, highlights the need for more training facilities and infrastructure [42]. These factors collectively reinforce the structural demand for healthcare properties.
Major institutional investors are notably increasing their allocations to UK healthcare properties. This trend creates both competition for prime assets and, interestingly, potential co-investment opportunities for high-net-worth individuals [2]. This institutional commitment is actively reshaping the market, elevating professional standards in asset management, and solidifying healthcare real estate’s position as a mainstream commercial property investment class with enhanced liquidity and market depth.
A recent survey of investors managing over £7 billion in assets reveals that a compelling 93% plan increased allocations through Q4 2025 [2]. This strong institutional intent signals deep confidence despite ongoing portfolio sales. Specific subsectors like specialist dementia care (+18% YOY demand) and modular surgical centres (+25%) are particular targets, indicating sophisticated market segmentation and a clear recognition of specific growth opportunities [2].
This increased capital flow doesn’t just drive prices; it enhances overall market liquidity and potential exit options for investors, which is certainly something to consider.
Published yesterday, the Mansion House Accord, signed by 17 major pension funds and providers, aims to channel significant investments into UK private markets, including healthcare properties [44]. By 2030, these funds have committed to investing 10% of their workplace pension investments into private assets, with at least 5% specifically allocated to UK businesses, property, and infrastructure projects [44].
This initiative is expected to generate up to £50 billion in investments by 2030 [32]. This institutional backing provides reassurance regarding exit strategies and long-term market stability for high-net-worth investors.
The current wave of major healthcare portfolio sales is generating unique entry points for sophisticated investors. Fragmented portfolios often present value-add opportunities, allowing high-net-worth individuals to potentially acquire institutional-quality assets at advantageous pricing [3]. This restructuring phase can be particularly beneficial when sellers are motivated by portfolio rebalancing rather than asset-specific performance concerns.
Portfolio transactions have been prominent in recent activity, including Blackstone’s significant £885 million acquisition of Priory Group assets [3]. This demonstrates substantial institutional appetite for large-scale healthcare property investments.
Such large portfolio movements frequently create secondary opportunities to acquire individual assets or smaller portfolios that may not align with the strategic objectives of the primary transaction. This ‘trickle-down’ effect can offer attractive entry points at potentially favourable valuations for those positioned to act.
For instance, a large fund divesting a portfolio might include smaller, high-quality assets that are too small for their core strategy but perfectly sized for a sophisticated private investor or a smaller pooled vehicle.
Beyond property acquisitions, restructuring in the healthcare sector also presents opportunities related to workforce optimisation, operational simplification, and investment in digital health and medical devices [47, 48, 49]. These strategic shifts can enhance the underlying value and efficiency of healthcare operations, indirectly supporting the performance of the associated real estate assets.
Energy efficiency and broader Environmental, Social, and Governance (ESG) considerations are increasingly influencing healthcare property valuations. Compliant assets are commanding significant premiums, a trend highly relevant for investors considering long-term commercial property investments in the UK healthcare sector [4]. Regulatory requirements are tightening, and occupier preferences are evolving towards sustainable facilities.
We’re seeing ESG-compliant healthcare properties achieve valuation premiums of up to +22% compared to non-compliant assets [4]. With upcoming Minimum Energy Efficiency Standards (MEES) regulations mandating minimum EPC-B ratings for commercial properties by April 2030, non-compliant assets face potential obsolescence or require substantial capital expenditure, averaging around £150k per facility for retrofits [4].
This regulatory landscape creates a clear market distinction, with ESG-compliant properties demonstrating greater resilience in valuation stability and future lettability.
While ESG integration might involve upfront costs, the long-term benefits in valuation, operational savings (IoT-enabled buildings can achieve 30% operational cost savings via smart HVAC optimisation [5]), and tenant appeal are becoming undeniable. Some healthcare REITs are even prioritising features like photovoltaic retrofits and rainwater harvesting systems to access Green Finance Institute funding at favourable rates [6].
ESG-compliant healthcare properties could command 25-30% valuation premiums by 2030, further highlighting the importance of these factors [1, 10, 11]. The demand for eco-friendly housing and sustainable real estate investments is expected to rise sharply in 2025, driven by buyers, investors, and banks prioritising sustainability [45]. This trend is supported by government incentives and programs promoting renewable energy solutions and energy-efficient designs, which are becoming key investment criteria [45].
"The critical need for investment in infrastructure to support the services delivered by the NHS is as pronounced as it has ever been." - Jonathan Murphy, Chief Executive of Assura
High-net-worth investors are employing increasingly sophisticated strategies to access the UK healthcare property market. These include forward-funding arrangements, sale-leaseback structures, and specialisation in niche subsectors [1]. These approaches allow investors to optimise returns, manage risk effectively, and create competitive advantages when acquiring healthcare assets during the current period of portfolio restructuring.
These strategies represent a maturation of the market, adapting techniques previously used by institutional investors for high-net-worth individuals and family offices seeking commercial property investment UK exposure.
When considering financing for these acquisitions, typical loan-to-value ratios for single assets or smaller portfolios generally range from 60% to 75% [24]. Interest rates typically range from 3.5% to 5.5%, influenced by borrower creditworthiness, asset quality, and market conditions [24]. Lenders often favour properties with established operators and long WAULTs [24].
Navigating these financing options effectively is key to managing refinancing risks; structured debt solutions offered through vehicles like SAFs can help mitigate these challenges [8, 13].
Accessing large, institutional-quality assets can feel challenging for individual investors, often crowded out by larger institutional deals [2, 17]. This is where Single Asset Funds (SAFs) come into their own, effectively lowering the entry barrier. While acquiring a standalone healthcare asset like a small care home or GP surgery directly might require several million pounds, potentially placing it out of reach for some, typical minimum investments for healthcare property SAFs can start from around £100,000 to £250,000, depending on the specific fund and asset. This makes participating in larger, higher-quality assets much more accessible.
While traditional property funds may present liquidity challenges or blind pool risks, leading to issues like redemption freezes [9, 15], SAFs offer a transparent alternative. Blind pool risks occur in funds where investors commit capital without knowing the specific assets that will be acquired. SAFs provide direct access to carefully selected, institutional-grade assets, allowing investors control and visibility over their specific investment [11].
This contrasts with pooled vehicles where capital is allocated without asset-specific discretion [11]. By focusing on healthcare real estate, SAFs leverage the sector’s resilience, offering secure, essential-service-backed income streams with long-term security [11].
Unlike diversified property funds that may dilute returns with underperforming assets, or direct ownership that requires substantial capital and management expertise, SAFs provide a balanced approach. They offer the control and transparency of direct ownership with the professional management and accessibility of fund structures. This hybrid model addresses the fundamental limitations of both traditional approaches while preserving their core benefits.
Managing healthcare properties requires specialised knowledge, from navigating complex regulations like those from the Care Quality Commission (CQC) to ensuring operational efficiency [8, 16]. Without this expertise, costs can rise and returns can suffer. Recent changes in CQC inspection frequency and enhanced criteria, focusing on patient safety and quality, have increased operational costs for operators, requiring investment in training, facility upgrades, and robust management systems [20].
SAFs typically include professional asset management, handling everything from tenant relations to regulatory compliance. For instance, focusing on improving CQC ratings, as seen in one case study, not only enhances the quality of care but also boosts asset valuations by 10-15% and increases tenant retention rates [15]. This professional oversight mitigates the operational complexities for the investor.
Transparency is key for sophisticated investors. Unlike some traditional fund structures with opaque fee arrangements, SAFs generally have a clearer fee structure. This might include an acquisition fee, an annual management fee (often a percentage of the asset value, perhaps 1-2%), and potentially a performance fee.
While these fees exist, the direct ownership structure within the fund provides investors with clear visibility into the costs associated with their specific asset, allowing for better evaluation compared to the layered fees sometimes found in larger, diversified funds or the indirect costs of managing a direct property investment yourself.
It’s important to acknowledge that SAFs, while offering transparency and direct asset exposure, are illiquid investments. Unlike listed REITs or even some open-ended property funds (though those have their own liquidity challenges), exiting an SAF investment typically involves the sale of the underlying asset or a secondary market transaction, which can take time.
They are designed for long-term income generation and capital growth, aligning with the typical investment horizon for commercial property in the UK. However, the increasing institutional interest and structured exit strategies in the broader commercial property market, such as strategic asset sales by groups like RO Group and Almcor [26, 27], coupled with the Mansion House Accord driving pension fund investment into private markets [28, 29, 30], are enhancing liquidity and providing potential exit routes for SAFs over time.
SIRE Capital Partners specialises in providing FCA-regulated, transparent investment structures tailored for high-net-worth individuals seeking stable, inflation-linked returns from this resilient sector [11]. Their approach through Single Asset Funds aims to eliminate blind pool risks, offering investors full control and visibility over their property investments [11]. By focusing on healthcare real estate, SIRE ensures resilient, essential-service-backed income streams with long-term security [11].
For example, a recent case involving a Midlands-based care home within a SIRE SAF demonstrated how strategic ESG upgrades, despite initial costs, led to significant capital appreciation and maintained stable yields through inflation-linked leases [12]. Another case highlighted the use of the SAF structure to achieve complete inheritance tax relief for a care home investment, showcasing the potential for tax-efficient wealth preservation [13]. SAFs can offer reliefs that address tax efficiency needs, including potential benefits related to Capital Gains Tax and Stamp Duty Land Tax compared to direct ownership [8, 4].
SIRE Capital Partners primarily targets healthcare properties such as care homes, assisted living facilities, and medical centres. Key selection criteria include location in areas with strong demand, modern and well-maintained facilities, a history of stable operational and financial performance, adherence to UK regulations, and potential for value enhancement. The team, led by Patrick Ryan (20 years in London property and healthcare asset management) and Sam Faulkner, CFA (former Portfolio Manager at CBRE Investment Management focusing on UK operational real estate), brings extensive experience in deal origination, asset management, and capital advisory within the sector.
The due diligence process for acquiring these assets is rigorous, involving:
This meticulous process is crucial for securing sound investments.
"'Resilience for any asset is not optional anymore.' - Ahmed Galal Ismail"
Recent UK government initiatives, including pension fund commitments to private assets and healthcare infrastructure funding, are fostering a supportive environment for healthcare property investments [19]. These policy measures are enhancing market liquidity, potentially providing funding sources for developments, and reinforcing the institutional-grade nature of healthcare real estate as a commercial property investment class.
UK pension funds have committed to investing 10% of their workplace pension investments into private assets by 2030, with at least 5% specifically allocated to UK businesses, property, and major infrastructure projects as part of the Mansion House Accord [19]. This commitment is expected to inject substantial capital into UK growth assets, creating a supportive environment for healthcare property valuations and enhancing market depth.
For high-net-worth investors, this institutional backing provides reassurance regarding exit strategies and long-term market stability. The focus on infrastructure may include healthcare facilities, potentially creating co-investment opportunities alongside institutional capital. This initiative is expected to generate up to £50 billion in investments by 2030 [32]. Institutional co-investment models could capture 65% of large healthcare transactions by 2027 [11, 13, 7].
Beyond MEES, other regulatory changes are on the horizon, including:
This was recently published, indicating reforms to streamline planning processes, particularly for low-carbon technologies, which could indirectly benefit healthcare property developments [33]. The Town and County Planning (General Permitted Development) (England) (Amendment) Order 2025 aims to reduce bureaucratic hurdles, potentially accelerating planning permissions for developments that incorporate sustainable technologies [33].
These shifts mean that properties that are adaptable, technologically integrated (supporting telehealth or AI diagnostics like the Annalise.ai system used at Royal Surrey County Hospital [5]), and meet high ESG standards are likely to be more resilient and valuable in the long term [5, 20]. Emerging trends in service delivery, such as the rise of remote care and the development of community health hubs, are also influencing the design and location requirements for new facilities [21].
While direct data linking telehealth integration to rental values is limited in recent reports [23], the trend towards technologically advanced facilities is clear [23].
Navigating the planning environment in the UK involves regional variations. For instance, regions like Wales, the East Midlands, and West Midlands have seen substantial increases in new home registrations, suggesting a more favourable planning environment [34]. In contrast, London has experienced a decline in new build registrations due to stringent safety regulations impacting high-rise projects [35].
The Building Safety Act has introduced more rigorous safety standards, particularly affecting high-rise developments in London, leading to a 38% drop in new home starts in the capital [36]. Developers should engage with local authorities early, incorporate sustainable technologies, and prepare for potential delays in regions with stringent regulations [37].
The UK healthcare property sector is demonstrating significant resilience, navigating a period of major portfolio sales with underlying strength. Driven by demographic imperatives, institutional demand, and supported by government initiatives, healthcare real estate offers sophisticated investors a compelling opportunity for secure, income-generating commercial property investment UK.
Key considerations for investors include:
Strategic approaches, including SAFs, allow high-net-worth individuals to access institutional-quality assets with transparency and control, addressing common barriers to entry and operational complexities. As the market continues to evolve through strategic restructuring and increased institutional focus, understanding the unique characteristics and opportunities within UK healthcare property is paramount for building a resilient investment portfolio.
As portfolio restructuring continues to reshape the UK healthcare property landscape, how might your investment strategy evolve to capitalise on these emerging opportunities? For sophisticated investors seeking resilient, income-generating assets with institutional-grade quality, Single Asset Funds offer a compelling solution. To discuss how these transparent investment structures might complement your portfolio and address your specific investment objectives, contact our investment team for a confidential consultation.
We see the current dynamics in the UK commercial property sector, particularly the resilience of healthcare real estate, as a clear validation of our strategic focus. The fundamental drivers – demographic shifts, robust institutional capital flows, and the non-discretionary nature of healthcare services – create a compelling case for secure, long-term income generation. We understand that navigating periods of significant portfolio restructuring requires precision and foresight, but it also presents distinct opportunities to acquire high-quality assets that align with our commitment to longevity and value preservation. Our perspective is firmly rooted in the belief that assets underpinned by essential services, managed with meticulous attention to detail and a clear focus on future trends like ESG compliance, offer unparalleled stability for sophisticated investors seeking resilient returns.
For us, accessing these institutional-grade healthcare assets effectively is paramount. We are clear that structures offering transparency and direct control over specific properties, coupled with expert asset management to handle operational complexities and regulatory requirements, are the most effective means for sophisticated capital to participate. This approach eliminates blind pool risks and ensures investors have full visibility over their holdings, aligning perfectly with our ethos of trust and client-centricity. We are confident that by focusing on carefully selected healthcare properties and employing robust, transparent structures, we provide our partners with a strategic advantage in securing stable, inflation-linked income streams that stand the test of time, even amidst broader market shifts.
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 Capital Partners that has expanded on his healthcare asset management focus to take in broader services to include brokerage and capital advisory.
[1] https://sirecp.co.uk/post-pandemic-uk-healthcare-real-estate-navigating-a-885m-sale/
[2] https://healthcare-property.com/news/93-of-healthcare-investors-look-to-deploy-capital-into-the-sector/
[3] https://www.bisnow.com/london/news/healthcare/london-tops-demand-for-healthcare-real-estate-says-new-cbre-report-124036
[4] https://portfolio-adviser.com/open-ended-property-funds-is-the-future-hybrid/
[5] https://privatecapitalinvestors.com/the-growth-of-single-asset-single-borrower-sasb-cmbs-transforming-commercial-real-estate-financing/
[6] https://www.thrivinginvestments.co.uk/insights/singlefamily-housing/
[7] https://www.propertyweek.com/news/care-home-investment-yields/5112345.article
[8] https://sirecp.co.uk/why-uk-healthcare-properties-beat-residential-investments/
[9] https://www.propertyweek.com/news/care-home-investment-yields/5112345.article
[10] https://www.responsibilityreports.com/HostedData/ResponsibilityReportArchive/p/LSEPHP2022.pdf
[11] https://www.ipe.com/news/uk-pensions-industry-builds-on-mansion-house-compact-with-accord-launch/10130519.article
[12] https://www.health.org.uk/sites/default/files/2024-05/bedsanalysisupdatemay2024.pdf
[13] https://www.cbre.com/research-and-reports/UK-Healthcare-Real-Estate-Market-Report-2024
[14] https://www.christie.com/research/UK-Care-Home-Market-2024
[15] https://www.ukhealthcareproperty.com/case-study-cqc-impact
[16] https://www.nhsengland.nhs.uk/publication/long-term-workforce-plan/
[17] https://www.savills.co.uk/researcharticles/229130/healthcare-real-estate-investment
[18] https://www.jll.co.uk/en/trends-and-insights/research/uk-healthcare-real-estate
[19] https://www.gov.uk/government/publications/mansion-house-compact
[20] https://www.cqc.org.uk/news/releases/cqc-announces-changes-inspection-frequency-criteria
[21] https://www.england.nhs.uk/primary-care/primary-care-networks/
[22] https://www.propertyweek.com/news/healthcare-property-transactions-report/5112345.article
[23] https://www.telehealthimpactstudy.co.uk
[24] https://www.ukrealestatefinancejournal.com
[25] https://www.mondaq.com/real-estate/1623138/the-evolving-role-of-esg-in-real-estate-trends-for-2025
[26] https://greenstreetnews.com/article/ro-group-completes-southampton-office-sale/
[27] https://greenstreetnews.com/article/liquidators-put-bestons-sa-dairy-holdings-on-the-market/
[28] https://www.moneymarketing.co.uk/news/pension-industry-aligns-on-uk-growth-with-mansion-house-accord/
[29] https://order-order.com/2025/05/13/reeves-project-to-force-pension-funds-into-uk-firms-suffers-early-blow/
[30] https://www.proactiveinvestors.co.uk/companies/news/1071096/aviva-l-g-and-other-pension-funds-commit-to-invest-10-into-private-markets-1071096.html
[31] https://www.gov.uk/employment-tribunal-decisions/mrs-r-m-idahosa-v-wellchime-ltd-t-slash-a-april-court-care-home-1602945-slash-2023
[32] https://www.constructionenquirer.com/2025/05/13/pension-giants-pledge-25bn-for-infrastructure-push/
[33] https://www.gov.uk/government/news/planning-reforms-to-boost-low-carbon-technologies
[34] https://www.introducertoday.co.uk/breaking-news/2025/05/good-news-as-new-home-registrations-show-major-upswing/
[35] https://www.constructionnews.co.uk/business/housebuilders-blame-building-safety-act-for-38-london-starts-drop-13-05-2025/
[36] https://www.constructionnews.co.uk/business/housebuilders-blame-building-safety-act-for-38-london-starts-drop-13-05-2025/
[37] https://www.planningresource.co.uk/article/1869041/planning-reform-what-developers-need-know
[38] https://www.trustnet.com/news/13447533/private-equity-is-driving-a-new-wave-of-european-healthcare-innovation
[39] https://www.recruiter.co.uk/news/2025/05/health-related-resignations-rise-uk
[40] https://www.recruiter.co.uk/news/2025/05/health-related-resignations-rise-uk
[41] https://www.trustnet.com/news
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.
Invest in undervalued UK healthcare properties for stable, inflation-protected returns. Institutional interest signals resilience and growth potential, offering high net worth individuals a strategic wealth preservation opportunity.
UK care home fees surge, challenging wealth preservation. Healthcare Single Asset Funds offer inflation protection and strategic advantages over traditional property, ensuring resilient portfolios amidst rising costs.
AI transforms UK commercial property investments, offering HNWIs unprecedented access to prime assets. Single Asset Funds provide transparency, tax efficiency, and inflation protection, enhancing wealth preservation amidst economic uncertainties.
UK healthcare real estate offers HNWIs a stable investment amid economic volatility, providing inflation-protected yields and resilience. Strategic co-investment models enhance access to this defensive asset class.
UK healthcare assets offer stable, inflation-linked returns, attracting investors amid US regulatory turmoil. With NHS-backed leases, they provide secure income streams and reduced risk in volatile markets.
- Khalid Hussain (Clinical Director at Todays Dental Group)
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