A European healthcare fund backed by Asian and Australian institutional investors has made its first investment.
ECP European Healthcare Real Estate has acquired a portfolio of seven aged-care properties in and around Graz in Austria for approximately €50m.
Emerge Capital Partners, which runs the fund, said the transaction represented the cornerstone investment.
The company is hoping to eventually raise €250m of equity for the fund and will begin talking to European pension funds and institutional investors over the next three months.
With leverage, it will look to build up a €500m portfolio spread across markets in Germany, Belgium, Luxembourg, Switzerland and Austria.
Emerge Capital Partners said healthcare offered one of the highest levels of risk-adjusted returns and lowest levels of volatility within the estate asset class, characterised by long leases and low vacancy rates.
“Institutionalisation of the asset class is occurring globally, typically resulting in yield compression when portfolios are consolidated into investment grade asset transactions,” it said.
Dirk Grosse-Wördemann, fund manager and partner at Emerge Capital Partners, said: “We see the sale-and-leaseback structure and consolidation of real estate within the healthcare sector as a very positive step to release capital to operators, who are continuing to reinvest into the provision of better healthcare services.
“This is a similar structural industry transition which has occurred in North America, Asia and the UK, which has had a positive effect on patient services and quality of care.”