Key Takeaways 

• The Finnish social infrastructure* sector recorded nearly €1.9 billion in investment volume last year with several large-scale transactions above €50 million driving the activity to new record level. In 2023, the Finnish investment market has witnessed a slowdown due to the continued rise in interest rates and the shift in the pricing environment. The healthcare investment volume for the first three quarters of the year was €244 million, down 83% (y-o-y). The prime elderly care yield is standing at 5.00%, and the prime child day care is at 5.50% in October 2023. 

• Investors remain interested in the social infrastructure sector due to the demographic and structural megatrends that are driving demand in many subsectors within this growing sector despite the increased uncertainty. Social infrastructure provides long-dated inflation-linked income profiles, where the typical leasing terms are between 10-15 years with strong public sector covenants.

• Finnish population continues to age at a rapid pace, quicker than any other European country. This demographic trend, aligned with the pressure for the public sector to outsource, will support social infrastructure and healthcare sector growth. A total of 80,500 clients were accommodated in social care housing services as of 2022, where the private sector share was 56%, having strong growth since 2021 from a 46% share.

*Social infrastructure sector is referring to all public / public like properties, such as educational facilities, healthcare properties and other publicly occupied properties such as authority buildings. Healthcare sector refers only to nursing homes, healthcare centers, hospitals and child day care.