Hamburg-headquartered Values Real Estate has launched its second fund focusing on healthcare real estate, and bought three assets for the new vehicle.
The special alternative investment fund Values Health Invest II, classified as an Article 8 fund, will focus on both outpatient and inpatient healthcare real estate, as well as life sciences assets.
This primarily includes hybrid living and care concepts as well as properties for assisted living and medical centres, but also selected inpatient health properties such as nursing homes or rehabilitation clinics. Medical offices, health insurance and educational or medical retail premises will also be considered.
The fund has an investment pipeline of around €80 mln and a total target volume of €350 mln.
It has already struck deals for three properties, the first of which closed at the beginning of June. This is a centre for long-term psychiatric care in Glückstadt, northwest of Hamburg.
The property in Glücksstadt, which is 100% let on a weighted average lease term of 25 years, was built in 1933. It was expanded with a new buiding in 2006 and modernised in 2010.
The existing old building is currently being completely renovated by the tenant and will have a future capacity of 215 beds on an area of over 15,000 m2, adding to the remaining 69,000 m2 property.
The seller of the property is a fund managed by Oaktree.
Thilo Wagner, managing director for the health and social infrastructure division at Values Real Estate, said: 'The healhhcare sector in Germany has shown above-average growth for years and consequently an increasing share of gross value added in Germany.
'An aging population and increasing life expectancy will further reinforce this trend. In addition, we are experiencing enormous demand for healthcare properties in the institutional sector, especially in the savings and banking sector.
'Two main reasons for this are the fact that the health care system is independent of economic cycles and the expected stable cash flows from leases that are usually long-term and value-secured.'
Georg Ritgen, head of transaction health at Values Real Estate, added: 'On the one hand, political decisions that limit the expenditure side of the health system create the pressure to consolidate.
'They are increasingly forcing the healthcare industry players from different disciplines to create synergies through cooperation.
'On the other hand, we see a constantly increasing demand for more and better health services in Germany. With our fund strategy we anticipate these two trends.
'In doing so, we want to contribute as a constructive partner to the healthcare sector by further strengthening the cooperation between the healthcare sector and the real estate sector.'
In autumn 2020, Values launched Values Health Invest I, which, unlike its current successor, focuses exclusively on outpatient medical centres and medical care centres. This fund has already acquired ten properties and currently has investment funds of more than €300 mlm.
