Record Year 2016
2016 – a year of superlatives. Never before have more care properties in Germany changed hands. More than € 1.75 billion were turned over in portfolio deals alone. Markus Bienentreu, Managing Director at TERRANUS, explains why the data still leave a lot to be desired as far as precision goes.
€ 1.9 billion or € 2.2 billion or even € 2.5 billion? At the end of the year, estimates of the past-year’s transaction volumes for the care property market are sprouting like mushrooms – a phenomenon comparable to divining coffee grounds for Markus Bienentreu, Managing Director at TERRANUS. “From the large transactions we know transaction volumes added up to more than € 1.75 billion. But single sales between individual operator companies and church institutions often occur out of public view. To bandy precise figures around in this context suggests a precision that doesn’t exist in this market.”
€ 1.75 billion for large transactions
A total of € 995 million were paid for the portfolio acquisition of “Primonial RIM SA”, the purchases of “Deutsche Wohnen” totalled around € 420.5 million, and “E&G Funds & Asset-Management” turned over more than € 100 million. These large transactions alone comprise a transaction volume that pushes the sector into a previously unattained dimension.
Apart from these large deals, a number of care properties also changed hands in off-market sales between individual operator companies, church institutions and private individuals. Based on normal market prices, total transaction volumes probably stack up to more than € 2.25 billion.
Interesting market also in 2017
“The care property market remains far too small-scale and opaque for a reliable calculation. But the trend is clear at the bottom line: care properties are being increasingly added to portfolios as an attractive asset class – and this trend is set to continue in 2017, as medium- and long-term prospects remain good,” notes Bienentreu.
No bargain, but attractive
But more than ever, detailed market knowledge is essential when seeking the income property, as multiples as high as 16 times one year’s rent have been paid for acquisitions in some cases. TERRANUS compiles the most important market data and a well-researched analysis of healthcare and care properties in its 2017 Sector Monitor, which can be ordered from the end of January 2017 from here.