A New Way To Invest In Commercial Property
Discover the benefits of pooling resources to access institutional- grade property in a Single Asset Fund.
The UK economic environment continues to shift, presenting a unique context for sophisticated investors. For high-net-worth individuals and families seeking stability and reliable income, the focus is increasingly turning towards asset classes that demonstrate resilience against market fluctuations.
While commercial property investment UK remains a cornerstone for many, identifying sectors with inherent security and predictable returns is paramount. Healthcare real estate, it seems, stands out as a compelling option in this climate. For sophisticated investors seeking both capital preservation and inflation-protected income streams, healthcare property offers a compelling combination of defensive characteristics and attractive yields that few other asset classes can match in the current economic environment.
Healthcare property, encompassing everything from GP medical centres and dental practices to specialist care homes, benefits from demand driven by fundamental demographic shifts rather than being solely tied to economic cycles. With a steadily ageing population – projected to increase significantly over the next decade, particularly in rural and coastal areas where one in three people are already aged 65 and over in some local authorities – the need for healthcare services and the facilities that house them continues its upward trajectory.
This essential, needs-based characteristic provides a defensive quality that is particularly attractive when broader economic indicators feel less certain.
This piece explores how sophisticated investors can effectively navigate the current economic environment to secure robust returns from UK healthcare property. We’ll delve into the sector’s inherent strengths, strategic approaches to investment, and the structures designed to enhance both security and efficiency for discerning capital.
Amidst the UK’s economic changes, healthcare property investments are indeed proving notably resilient when compared with many traditional commercial real estate sectors. This resilience largely stems from the non-discretionary nature of healthcare services; demand remains remarkably consistent regardless of economic performance, providing a solid foundation for stable occupancy and, crucially, rental income.
Healthcare properties, particularly those underpinned by secure, long-term leases to tenants often supported by the NHS or robust private operators, offer income streams that can genuinely weather economic volatility. This inherent stability makes them increasingly attractive to high-net-worth investors prioritising capital preservation and reliable returns.
We’ve seen strong investor confidence reflected in the market. According to a CBRE survey, 93% of investors indicated they are increasing their allocations to healthcare property [3]. Total investment in the sector has reached a substantial £7.8 billion, reflecting this positive sentiment and the underlying demand for facilities like care homes across the UK [3].
This trend firmly underscores healthcare real estate’s position as a defensive asset class capable of delivering consistent returns despite broader market conditions.
Having established the inherent resilience of healthcare property investments, it’s crucial to consider how geographical diversification can further enhance returns and stability. The shifting geographical focus of property investments across the UK presents strategic opportunities specifically within the healthcare real estate sector.
While London and the South East have historically attracted the lion’s share of investment, there’s a discernible trend of capital migrating towards the Midlands and Northern regions. This movement is largely driven by the pursuit of potentially higher yields and lower entry costs compared to the traditionally premium southern markets.
This was recently published: In the first four months of 2025, 39% of buy-to-let transactions occurred in the North or Midlands, a significant increase from previous years [1]. This trend, reported by Hamptons, reflects investors prioritising income returns, which aligns perfectly with healthcare property’s income-focused nature [1].
The average property price for investors in these areas is approximately £150,480, significantly lower than the £292,240 average in the South [2]. The North East, for example, has seen 28% of homes sold in 2025 being buy-to-let investments, compared to a national average of 10%, indicating robust demand and attractive yields in specific regional healthcare property markets [3].
By strategically diversifying portfolios across these regions, sophisticated investors can potentially enhance resilience by combining sector-specific security with the regional yield advantages emerging in areas like the North West [8]. Developers are increasingly targeting Northern England projects, offering average yields exceeding London equivalents by as much as 150 basis points [3, 8].
Key geographical investment trends include:
The increasing professionalisation of property investment through corporate structures offers significant advantages for high-net-worth individuals and SME owners investing in healthcare real estate. Utilising limited companies, Special Purpose Vehicles (SPVs) – a legal entity created for a specific, limited purpose – and Family Investment Companies can enhance tax efficiency and provide greater flexibility in managing healthcare property portfolios.
This is particularly important as the UK’s tax regime undergoes changes, including shifts in corporation tax rates.
The dramatic increase in the use of corporate structures reflects a strategic response to the UK’s evolving tax landscape. Data shows that 60% of landlords planning to purchase property in the next year intend to use a limited company structure, with the share of properties held in limited company ownership nearly doubling since 2020, now standing at 66% in 2025 [4, 5, 16].
For healthcare property investors, these structures offer mechanisms to optimise tax efficiency while maintaining stable returns. This shift towards limited company ownership suggests a sophisticated approach to wealth preservation, especially prudent given anticipated inheritance tax changes.
These structures can also provide benefits like improved succession planning and potential protection from personal liability, making them increasingly essential components of a comprehensive healthcare property investment strategy.
For SME owners who are also sophisticated investors, understanding the fee structures associated with investment vehicles is crucial for transparent decision-making. While direct ownership involves acquisition costs, legal fees, and ongoing management expenses, pooled investment structures like Single Asset Funds (SAFs) typically involve management fees (often a percentage of assets under management), potential performance fees, and acquisition costs embedded within the fund structure.
Transparency around these fees is vital, ensuring investors have a clear picture of the total cost of investment and how it impacts net returns.
Consider the example of Dr. Sarah, who successfully utilised SSAS pension funds, a tax-efficient structure, pooled into a single asset fund to acquire a dental practice building [2]. This allowed her business to pay rent into the pension tax-free, demonstrating how strategic structuring can enhance returns and provide long-term benefits [2].
This approach not only provided a secure asset for her pension but also created a tax-efficient income stream for her business, illustrating the tangible benefits of carefully structured healthcare property investments.
"Healthcare is a resilient asset class — it offers robust demand levels and traditionally, long lease terms." - Tom Morgan
Evolving regulatory requirements and Environmental, Social, and Governance (ESG) standards are increasingly influencing healthcare property valuations and investment returns. Proactive compliance with standards, such as upcoming energy efficiency requirements, can not only mitigate risks but also enhance property values and secure long-term returns.
To navigate the complex regulatory landscape while maintaining yields, investors must consider upcoming EPC standards. Properties compliant with upcoming EPC standards, requiring upgrades to EPC B by 2030, are commanding valuation premiums of approximately 22% [5, 6, 12].
This substantial premium represents a significant opportunity for forward-thinking investors. Rather than viewing regulatory changes as merely compliance costs, they can be strategic investment opportunities that enhance asset values.
Key considerations for ESG compliance in healthcare property include:
For healthcare properties, which often have complex operational requirements, early adaptation to these standards can create competitive advantages and secure tenant relationships. Investors who proactively address these requirements may not only avoid future compliance costs but potentially benefit from enhanced valuations, improved tenant retention, and greater portfolio resilience in an increasingly ESG-conscious investment landscape.
Non-compliance, conversely, can lead to increased operational costs, decreased property value, fines, and potential issues with financing and insurance.
Building on the importance of regulatory compliance and ESG, certain specialised sub-sectors within healthcare property are emerging as particularly attractive investment opportunities. High-net-worth investors and SME owners can identify and capitalise on growth areas such as specialist care homes, GP medical centres, and dental properties.
These segments often offer enhanced security and potentially higher returns due to their specific operational characteristics and demand dynamics.
Projected increases in transaction volumes and operator expansion plans indicate growing confidence in specialist healthcare sub-sectors [6]. Specialist care homes are attracting significant capital, with 62% of operators planning expansion [6].
For investors, this trend presents opportunities to access properties with potentially higher yields while maintaining the security characteristic of healthcare investments. The regional dimension, with particular strength in areas like the North West, aligns with broader geographical investment shifts and suggests targeted regional strategies may be especially effective [6].
Operator expansion plans are particularly significant as they indicate strong underlying operational demand, translating to secure tenancies and reliable income streams – crucial factors for investors seeking both security and returns in uncertain economic conditions. Transaction volumes in portfolio deals, such as the £885 million sale mentioned in recent reports, underscore the institutional appetite for these assets.
Recognising the growth potential in specific sub-sectors leads us to how income security is being enhanced. The evolution of lease structures within healthcare properties offers sophisticated investors new ways to secure long-term, inflation-protected income.
Innovative approaches to lease arrangements, including inflation-linked rent reviews, longer lease terms, and operational partnerships, can provide enhanced income security while offering flexibility to healthcare operators. This creates mutually beneficial investment structures that withstand economic fluctuations.
For investors concerned about inflation eroding returns despite long-term leases, the shift towards more sophisticated lease structures represents a significant evolution in healthcare property investment strategies. Flexible lease terms are increasingly being adopted for community healthcare facilities, balancing operator needs with investor security requirements while providing inflation protection mechanisms [1].
These innovative arrangements can provide investors with greater income predictability through mechanisms like inflation-linked rent reviews, particularly valuable in the current economic environment where inflation concerns persist.
Common mechanisms include RPI or CPI linkage, often with the inclusion of caps and collars – contractual limits that set maximum (caps) and minimum (collars) levels for rent increases linked to inflation indices – to provide a balance between protecting tenants and ensuring landlords receive minimum increases. Some leases may also feature fixed uplifts.
For high-net-worth investors, these structures offer enhanced downside protection while maintaining competitive yields. The average Weighted Average Unexpired Lease Term (WAULT) for UK healthcare property leases currently sits around 12 to 15 years, reflecting this emphasis on long-term stability.
This approach creates sustainable, long-term investment propositions that can withstand economic cycles and provide reliable income streams regardless of broader market volatility.
Consider the case of a family office that invested in a portfolio of GP surgeries in 2020 with inflation-linked leases featuring a 2% collar and 5% cap. When inflation spiked to over 9% in 2022, their income was protected by the 5% cap, which preserved tenant relationships while still delivering above-market rental growth.
This structure provided significantly better returns than fixed uplifts would have offered over the same period, demonstrating the value of thoughtfully structured lease arrangements.
Types of inflation-linked lease structures include:
While innovative lease structures enhance income security, it’s also vital to understand the operational landscape. While healthcare properties offer security advantages, they also present unique operational considerations that investors must navigate effectively.
Addressing challenges such as rising staff costs, regulatory compliance, and operational complexities is crucial to maintaining the security of healthcare property investments and optimising returns.
Operational challenges are a key consideration for healthcare property investors seeking to maintain secure returns [3]. Rising staff costs, for instance, directly affect operator profitability, which can ultimately influence rent affordability and property performance.
Understanding these operational dynamics is crucial for effective risk management and investment selection. Properties with operators who have robust staffing strategies and operational efficiencies are likely to provide more secure income streams.
This was recently published: The UK care home sector is currently grappling with significant challenges in securing staffing, primarily due to recent government policy changes aimed at reducing net migration [1, 2]. While the government is encouraging care homes to prioritise hiring domestic workers and proposing training programs, the sector remains under significant pressure [5].
Operators are exploring strategies like improved pay structures and utilising the existing overseas workforce where possible [6, 7]. Investors who develop expertise in these operational aspects can identify value-add opportunities and potentially negotiate more favourable investment terms.
This operational knowledge becomes a competitive advantage in securing the most resilient healthcare property investments with the strongest return profiles, particularly important during periods of economic change when operational margins may come under pressure.
When evaluating a healthcare property operator, sophisticated investors should look at several key metrics:
We’ve seen how integrating digital platforms can streamline operations, leading to significant administrative cost reductions, such as the 30% reduction achieved by one outpatient centre [1]. This highlights the importance of operational efficiency in supporting property performance.
"The only thing that makes sense is to strive for greater collective enlightenment." - Ram Dass
Navigating operational complexities and securing strong leases brings us to the investment structures that facilitate access. For high-net-worth individuals and SME owners, accessing institutional-grade healthcare property can sometimes feel challenging through traditional routes.
Single Asset Funds (SAFs) offer a structured solution, providing direct access to specific, high-quality assets without the complexities of full direct ownership or the blind pool risk associated with some diversified funds. SIRE Capital Partners specialises in this model, focusing on secure income real estate (SIRE) within the healthcare sector.
SAFs provide transparency and control, allowing investors to conduct detailed due diligence on a single asset before committing capital. This contrasts with traditional property funds that pool capital and allocate it across multiple assets without individual investor discretion.
While some may perceive SAFs as lacking diversification compared to holding multiple assets, diversification in commercial real estate is also achieved by selecting assets with low correlation to broader economic cycles, such as healthcare property, and by ensuring built-in security through long-term leases and essential service tenants.
SIRE’s healthcare SAFs offer this inherent security, mitigating risk through asset quality and income stability rather than simply asset count [PDS].
Investing through a SAF allows investors to pool resources, making high-value and complex properties accessible to those who might not afford them individually. This pooling can reduce individual risk and exposure. SAFs are typically managed by experienced fund managers with expertise in the healthcare real estate sector, meaning investors can benefit from informed decision-making and strategic investment approaches.
Furthermore, SAFs are often regulated by the UK Financial Conduct Authority (FCA), ensuring strict compliance with rules designed to protect investors [PDS]. This regulatory oversight provides a layer of trustworthiness and authoritativeness often absent in unregulated property syndicates [PDS]. SAFs can also offer tax transparency, where investors are taxed only on their share of income and gains, if at all.
Benefits of SAFs include:
Commercial property investment UK, particularly within the healthcare sector via SAFs, offers a resilient pathway for securing returns amidst economic change. SIRE Capital Partners delivers FCA-regulated, transparent investment structures tailored for high-net-worth individuals and SME owners seeking stable, inflation-linked returns.
Our Single Asset Fund model eliminates blind pool risks, offering investors full control and visibility over their property investments. By focusing on healthcare real estate, SIRE ensures resilient, essential-service-backed income streams with long-term security. This approach provides a compelling alternative for sophisticated investors looking to preserve and grow wealth in the current economic climate.
For sophisticated investors ready to explore healthcare property opportunities, conducting thorough due diligence on both the asset class and specific investment structures is essential. Consider consulting with specialists who understand both the operational nuances of healthcare facilities and the financial structures that can optimise returns while managing risk.
The current economic environment, with its combination of inflation concerns and demographic tailwinds, presents a particularly opportune moment to evaluate healthcare property’s role in your investment portfolio. How might your investment portfolio benefit from the stability and inflation protection that healthcare property assets can provide in today’s economic climate?
We firmly believe that secure income real estate, particularly within the healthcare sector, offers a fundamentally resilient investment pathway for sophisticated investors. Driven by non-discretionary demand and demographic tailwinds, these assets provide stable, inflation-linked income streams that are inherently defensive against broader economic shifts. Our focus on specific, high-quality assets like GP medical centres and care homes in strategically chosen regions aligns with this view, capitalising on areas demonstrating strong yield potential and underlying demand. We see proactive regulatory compliance and meticulous operational due diligence on operators not merely as obligations, but as essential components that enhance asset value and secure long-term returns for our investors.
Accessing institutional-grade healthcare property requires transparency and control, which is why we champion the Single Asset Fund structure. This model eliminates blind pool risk, providing investors with direct ownership and visibility over the specific asset underpinning their investment. It allows for pooled resources to acquire significant properties while benefiting from professional management and robust FCA regulation. We are committed to providing this clear, direct approach, empowering our clients with the ability to invest confidently in high-quality, income-producing assets that align with their wealth preservation and growth objectives.
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.
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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