CBRE has released its November 2024 edition of the CBRE Finland Healthcare Market Snapshot. In this article, CBRE’s Jussi Niemistö, Head of Research, Nordics, shares the key findings from the newly released healthcare report.
Investment activity is expected to recover through lower interest rates
In 2024, the Finnish investment market has seen continued low investment volumes due to the sustained high level of interest rates and lower availability of financing. However, the transaction volume is expected to pick up next year as financing availability increases and interest rates decrease. The healthcare investment volume for the first three quarters amounted to €244 million, marking an increase of 6% year-on-year.
By the end of the third quarter of 2024, the prime elderly care yield stood at 5.50%, while the prime childcare yield was at 6.00%. Yield movement has stabilized during 2024, with no further repricing in sight. Investor demand is increasingly focused on elderly care and medical properties.
The largest transaction in the sector during 2024 took place in Turku, where Hartela sold a medical center development project to Keva. The hospital and medical center will have a total area of approximately 14,000 square meters and will be entirely used by Terveystalo. In July, Niam acquired an 18,000 sqm portfolio of three healthcare and hospital properties from the eQ Community Properties Fund. Two of the properties are located in central Helsinki, and one is in Pori.
Aging demographics and tighter municipality finances drive the sector growth
The population of over 75-year-olds is expected to grow by 43% by the year 2045, corresponding to a total of 268,000 people (Chart 1.). Currently, 7% of people over 75 years old live in social care housing services, while the corresponding share for those over 85 years old is 16%. If these rates remain the same, this will mean an additional 24,400 permanent residents in social care housing services by 2045.
