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Healthcare Sector Set for Record Investment in 2018

Report claims overseas investors are capitalising on Brexit, attracted by supply shortage and ageing population

UK Healthcare Investment Levels 2017 2018

Investment in the UK's healthcare sector was strong in 2017, with Brexit unlikely to discourage future investment into the sector, according to new research by Knight Frank.

Total healthcare investments for 2017 reached £1.32bn, which is 88% higher than the 10-year average, and driven by favourable demographic changes such as an ageing population, as well as a shortage of available care beds.

The report notes that specialist property accounted for 28% of all commercial property investments in 2017, with healthcare investments making up 8% of all specialist property transactions.

Although the sector faced some challenges in 2017, notably relating to staffing levels and funding, Knight Frank expects transaction volumes in 2018 to exceed last year’s levels.

Investment into the healthcare sector so far this year has reached £75m, with a further £102m cited to be invested soon as a result of a £17m deal and an £85m fundraiser.

Looking ahead, the report explains that Brexit is unlikely to deter overseas investors, and that market fundamentals will keep the sector attractive, resulting in record levels of investment.

“In our view the healthcare sector is one that is least affected by Brexit volatility, as demand for healthcare services is typically driven by domestic factors," says the report.

“Attracted by the UK’s ageing population, an under provision of care home beds, the attractiveness of long-dated income and a weakened Sterling, we envisage overseas investors will re-enter the buoyed market in the coming year,” Knight frank continues.

A separate survey from the Office for National Statistics revealed that the majority of non-retired respondents chose property as their preferred option for funding retirement.

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