A New Way To Invest In Commercial Property
Discover the benefits of pooling resources to access institutional- grade property in a Single Asset Fund.
As economic uncertainty continues to challenge traditional investment strategies, high net worth individuals are increasingly seeking asset classes that offer both stability and attractive returns. Healthcare property has emerged as a compelling option, particularly as private equity firms pour unprecedented capital into the sector. This growing institutional interest validates the sector’s potential while simultaneously creating a more competitive landscape for individual investors to navigate.
The healthcare property sector’s appeal lies in its unique combination of defensive characteristics and income generation potential. Unlike traditional commercial real estate, healthcare facilities benefit from long-term leases, often with inflation-linked rent reviews, and tenants providing essential services that remain in demand regardless of economic conditions. These fundamentals have attracted significant private capital, reshaping the market dynamics for sophisticated investors.
Private equity firms have identified healthcare facilities as prime investment targets, directing substantial capital toward single-specialty hospitals and clinics. According to recent data, private equity investments in single specialty healthcare have totalled $3.7 billion in the last decade, accounting for over 35% of total hospital investments [1]. This capital has been predominantly directed toward established specialties including IVF, eyecare, mother & childcare, dialysis, and oncology—segments that offer scalable business models, lower capital requirements, and strong returns on investment.
The UK market has witnessed particularly notable activity, with the £1.6 billion buyout offer for Assura, a major owner of GP surgeries, by private infrastructure investors KKR and Stonepeak Partners representing a 32% premium over Assura’s recent closing price [2]. This transaction highlights the sector’s attractiveness to private equity and demonstrates the premium valuations institutional investors are willing to pay for quality healthcare assets.
This substantial influx of institutional capital demonstrates growing confidence in healthcare real estate as a profitable asset class. For high net worth investors, this trend serves as both validation of the sector’s potential and a signal of increasing competition for prime assets. Understanding which healthcare property segments are attracting the most institutional interest can provide valuable guidance when constructing a portfolio in this sector.
“The healthcare sector is characterized by strong operational performance, rising demand, and attractive lease features, making it appealing to investors even in challenging economic conditions.” – CBRE UK Real Estate Market Outlook 2024 [3]
As private capital flows into healthcare properties, high net worth individuals must carefully evaluate different investment structures. The private equity approach typically involves leveraged buyouts that can introduce significant risk. Research indicates that healthcare entities acquired through private equity leveraged buyouts are nearly 10 times more likely to go bankrupt, as these firms leave the acquired healthcare entity with the debt used for its purchase [4].
This concerning statistic highlights a fundamental risk in private equity’s approach to healthcare property investment. The high debt burden placed on acquired facilities can compromise long-term financial stability, potentially undermining the very security that makes healthcare properties attractive to HNWIs seeking stable income-generating assets. Additionally, private equity firms typically aim to generate high returns within a relatively short timeframe (three to seven years), often implementing significant cost-cutting measures and management changes that prioritise revenue-generating services over long-term sustainability.
In contrast, more transparent investment structures such as Single Asset Funds (SAFs) offer investors direct ownership in specific healthcare properties without the excessive leverage often employed by private equity firms. These structures typically prioritise stable, long-term income generation rather than aggressive short-term value extraction. SAFs provide investors with greater transparency regarding the specific asset being acquired, detailed due diligence information, and more direct control over investment decisions—attributes particularly valued by high net worth individuals seeking to preserve wealth while generating reliable income.
The advantages of SAFs become particularly evident when examining their structural differences from private equity models:
"Healthcare real estate is characterized by stable demand, long-term leases, and resilience during economic downturns, making it an attractive investment option." - HBRE
With declining confidence among high net worth individuals in the broader UK economy, healthcare properties offer a compelling alternative investment case. Recent data shows confidence among HNWIs in the UK economy has plummeted to a record low, with only 48% expressing faith, down from 84% six months ago [5]. This dramatic decline in economic confidence creates a pressing need for investment alternatives that can weather economic uncertainty.
Healthcare properties, particularly those with NHS-backed tenants or essential services, can provide the stability and predictable income streams that wealthy investors are increasingly prioritising over growth potential in the current climate. The defensive characteristics of healthcare properties stem from several factors: the essential nature of healthcare services ensures consistent demand regardless of economic conditions; long-term leases (often 15-25 years) provide income visibility; and many healthcare tenants benefit from direct or indirect government funding, reducing counterparty risk compared to purely commercial tenants.
According to CBRE’s UK Real Estate Market Outlook 2024, the healthcare sector demonstrates strong operational performance with rising demand and attractive lease features, making it appealing to investors even in challenging economic conditions [3]. This resilience is particularly evident when comparing healthcare properties to other commercial real estate sectors during periods of economic volatility.
When examining yield stability, healthcare properties often provide more stable and attractive yields compared to general commercial real estate. This stability is largely due to long-term leases, often backed by government funding, and the essential nature of healthcare services, which ensures consistent demand. Healthcare properties typically offer yields between 4-6%, compared to prime office space at 3.5-5%, retail at 5-8% (with significant volatility), and industrial at 3.5-5.5%.
As regional property markets across the UK show varying growth trajectories, high net worth investors can optimise their healthcare property portfolios through strategic geographic diversification. Regional cities are presenting new opportunities for healthcare property investments, driven by regeneration initiatives and demographic shifts. Manchester’s £10 billion masterplan is set to transform the city, potentially increasing demand for healthcare facilities [6].
This regional diversification trend presents opportunities for healthcare property investors to identify emerging hotspots where healthcare facilities may benefit from broader economic development. Cities undergoing major regeneration often see increased population density, rising incomes, and greater healthcare needs—all factors that can enhance the performance of healthcare property investments in these locations.
By identifying these emerging regional opportunities before institutional capital drives up valuations, investors can potentially secure higher yields while maintaining the defensive characteristics that make healthcare property attractive. The importance of regional diversification is particularly evident when examining rental growth patterns across the UK, which vary significantly by region and highlight the importance of a geographically diversified approach to healthcare property investment.
Recent market activity further supports the case for regional diversification. According to Savills, debt capital for the UK property market is now coming from lenders in 47 countries, a record number [7]. This diverse capital flow creates opportunities for healthcare property investors to access financing for regional acquisitions, potentially on more favorable terms than in previous years.
Recent changes to UK tax policies create important considerations for high net worth individuals structuring their healthcare property investments. The UK government has ended the ‘non-dom’ tax status, effective April 2025, which is expected to raise £2.6 to £3.4 billion annually [8]. This major tax policy shift directly impacts how HNWIs, particularly those with international ties, structure their UK investments.
For healthcare property investments, this change may influence decisions about direct ownership versus fund structures, potentially increasing the appeal of tax-efficient vehicles that can optimise returns while maintaining compliance with the new tax landscape. The elimination of non-dom status means that foreign residents in the UK will now pay taxes on their worldwide income and gains, not just on UK-earned or repatriated income as previously allowed.
The practical implications of these tax changes for healthcare property investors include:
Additionally, the stable, long-term income streams generated by healthcare properties can help offset potential increases in tax burden through predictable cash flows, making them comparatively advantageous versus more volatile asset classes in the new tax environment.
"Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world." - Franklin D. Roosevelt
As private equity firms aggressively target healthcare facilities, high net worth individuals must develop strategic approaches to compete effectively. The intensifying competition requires sophisticated investors to identify opportunities that may be overlooked by institutional capital or to position themselves advantageously in competitive situations.
For high net worth investors seeking to navigate this competitive environment, several strategies can prove effective:
The growing interest among high-net-worth investors in alternative investments, including healthcare property, is part of a broader trend driving financial institutions to expand their services for ultra-high-net-worth individuals, creating new opportunities for accessing healthcare property investments through specialised platforms and advisory services.
The UK healthcare property sector presents a compelling investment case for high net worth individuals seeking secure yields amid economic uncertainty. While private equity’s growing presence creates competition, it also validates the sector’s potential and creates opportunities for sophisticated investors who can navigate the market strategically.
By understanding the fundamental differences between private equity’s leveraged approach and more sustainable investment structures, focusing on regional diversification opportunities, optimising tax efficiency, and leveraging the sector’s defensive characteristics, high net worth investors can potentially secure attractive risk-adjusted returns from healthcare property investments.
For those considering healthcare property investments, several practical steps can enhance success:
As economic uncertainty persists and traditional investment classes face volatility, healthcare property’s combination of income security, inflation protection, and essential service provision makes it an increasingly important consideration for sophisticated investors seeking to preserve and grow their wealth in challenging market conditions. For investors seeking transparent, direct access to healthcare property investments, Single Asset Funds offered by specialists such as SIRE Capital Partners provide an alternative to the leveraged buyout approach favoured by private equity, potentially offering more sustainable returns with greater investor control and transparency.
We see the increasing institutional focus on UK healthcare property as a clear validation of the sector’s fundamental strength and defensive characteristics. While this trend highlights the asset class’s appeal, it also underscores the critical need for sophisticated investors to choose structures that prioritise long-term security and transparency over aggressive, short-term strategies. We believe that investment models relying heavily on leverage, as often favoured by private equity, introduce undue risk that fundamentally undermines the stable, income-generating potential that makes healthcare property so attractive to high-net-worth individuals seeking wealth preservation.
Our perspective is firmly rooted in providing direct, transparent access to high-quality healthcare assets. We advocate for structures that eliminate blind pool risk, offering investors clear visibility and control over their capital deployed into essential services with long-term leases. This approach, focused on stable income streams and capital preservation, naturally positions us as a trusted partner for investors navigating a more competitive environment. We understand the importance of regional diversification and tax efficiency in optimising returns, and we are committed to identifying opportunities that align with our core principle of delivering secure, inflation-linked income from this resilient asset class.
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.
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