The amount of capital invested into healthcare infrastructure is expected to increase from the current $270bn (€236.6bn) to $470bn over the next five years, according to a new report published by Octopus Group.
The report - based on a survey of 100 global institutional investors which had a collective $6.8trn of assets under management - showed that global ageing population growth will help drive $200bn of investment into the healthcare infrastructure over the period.
The report revealed that the respondents which are already invested in healthcare infrastructure plan to increase their stake in the asset class by more than half over the next five years from the current avaerage portfolio allocation of 6.1% to 9.5% by 2023, with ageing demographics supporting the investment case.
”The investment opportunity is driven by the current shortage of good quality housing to suit later life which is urgently needed to accommodate the growing numbers of retirees and elderly,” the report stated.
Of the regions surveyed, the UK will attract the most inward investment into healthcare infrastructure over the next five years, from those who are yet to invest, the report showed.
In spite of Brexit, more than seven in 10 of those investors surveyed which have yet to invest in the sector are still considering allocating funds to the UK, while 60% of those global institutional investors surveyed, invested in healthcare infrastructure, already focus investments in the UK.
Benjamin Davis, the CEO of Octopus Healthcare, said: “Not only is the ageing population growing, but the make-up of this group is changing beyond recognition. Improved quality of life in later years is transforming the way the over 60s live.
”This group is more active than ever before and have higher expectations than previous generations. Globally there is a significant lack of accommodation to cater to this varied group’s needs. This demographic shift is creating a strong investment opportunity for institutional investors.”
Hiti Singh, the head of institutional funds at Octopus, said: “The expected end of the market bull run, coupled with heightened political risk across the globe, is driving institutions to alternatives in a hunt for returns.
“Alternatives and within this, real assets, meet institutional investors’ requirements for long-term, tangible investments.”