Funding / Real Estate
INVESTING Individual Investor Financial Adviser Institutional Investor FUNDING Entrepreneur Real Estate
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Calling all real estate directors – public, private and in-between!

22 Sep 2017 By Octopus Real Estate

If you thought that healthcare property is a bit niche, think again. Healthcare, like student accommodation 15+ years ago is booming. But if you think that you need specialist expertise to get into this market; you do.

Fortunately the good news is there are experts out there who can support you, reducing the risk that you might not get the most out of the opportunity and see the maximum return for your efforts. It’s also an area that’s becoming increasingly mainstream as other landowners look to healthcare as a way to drive revenue from their assets.

What’s driving the healthcare property market?

Put simply the healthcare property market is being driven by an ageing population and increasing demand for healthcare services. We’re living for longer and need a variety of support throughout our old age. Typically as we get older we may need the services of our GP and healthcare professionals more often; we may decide that we need a level of assisted living – ranging from retirement housing to care homes; and for those with disabilities and long term health needs, more specialist housing is in demand.

As a result the healthcare industry is one of the fastest growing markets, with high demand for property and healthcare premises for both public and private sector providers.

Here’s a snapshot of the opportunity:

  • The demographic bubble is starting to hit. The numbers of people over 65 years are expected to increase by 12% between 2015 and 2020. The numbers aged over 85 by 18%, and the number of centurions by 40%! While the general population is only expected to increase by 3% overall*
  • The UK’s over 65s have money to spare – Knight Frank estimates that the over 60s in England alone have £1,200bn in unmortgaged housing wealth. They’re increasingly looking to invest this in retirement properties including premium retirement apartments with luxury facilities. As such retirement housing can achieve high sales rates per square foot, and be highly desirable
  • The government wants more specialist housing for people with disabilities and long term health needs, as this delivers per capital financial benefits by reducing the use of public services

So what are your options if you fancy investigating the healthcare sector further? How can you maximise the value of your real estate? Should you sell your site for a quick return or drive long term value from it through income?

Both options are viable, it’s just a question of getting the support needed to ensure you maximise the opportunity.

For example, do you know what the long term potential is for your site? Should you just sell the land, or get planning for a scheme? If the latter, could healthcare drive more value from the site than just a purely residential scheme?

Healthcare might unlock additional GDV for your site, deliver the council’s targets for certain uses, and do so in a really imaginative, value enhancing way. Who’d want a council planning team to think they were heroes? Ridiculous!

To do this you will need the following:

  1. Data analysis – you need to obtain data on the population, predications for long term health needs, as well as understanding the income levels you can expect from a scheme. For example, a retirement apartment might sell for £800K in one city, £200K in another
  2. Planning expertise – what type of scheme is going to maximise the value of the site and be a win-win with the local planning authorities? You will need to tick a lot of boxes to ensure everyone gets what they need
  3. Development skills – this is where healthcare becomes a bit more niche. You may have experience with say a residential development, but it would be great if you had operational models in the healthcare sector so you drive the investment value of your site

Don’t quite have this expertise? Here’s where we fit in

Octopus Healthcare works with landowners to put all of the above together. As a specialist healthcare funder-developer and operator we work with public and private sector, professional services – and lucky landowners – investing in their sites to meet the demand for healthcare services.

This may involve a straight forward acquisition of the site, or a joint venture that allows the landowner to maximise the long term value of their site through income. Having the support and experience of a 45+ strong team, including a £1.4bn property portfolio, means that you don’t have to have that ‘niche’ experience that makes healthcare a difficult market to get into.

If this sounds interesting and you would like to explore the opportunity in more detail, please get in touch. Call me on +44 (0)20 7776 7973 or email [email protected]

*, Political challenges relating to an aging population:

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