Italian Healthcare Snapshot | 2022
The Italian Real Estate Healthcare Market Performance in 2022
- Francesca Fantuzzi
- Carlo Cocuzzo
- Claudia Solarino
Key takeaways:
Increasing demand for long term nursing homes in the coming years | An aging population, longer life expectancy, declining average number of family members and greater job mobility will support demand for long term nursing homes in the coming years.
Specialised operators are more focused | The Italian nursing home market is increasingly privatised, shifting from a former public or non-profit organization predominance. The post Covid-19 era might see an acceleration of this process and consolidation of some groups.
Shortages in supply | Market supply is still very limited in Italy, with many regions still far from striking a good balance between supply and demand, although the development activity is fervid. This means that the market has room for high quality offer focused on wellbeing and services, affordability and inclusion.
Healthcare as a defensive asset class | Investors will continue to look at the sector with interest as a defensive asset class, especially as interest rates in real estate continue to rise. Furthermore, as inflation cools down, the growth rate of construction costs should start to drop a bit, therefore reducing the pressure on operating margins in the sector, at least on the development front.
From a Real Estate capital markets perspective, the healthcare sector has been growing consistently over the last couple of years, bringing in new investors, operators and developers throughout Europe and Italy.
At an EMEA level, Real Estate healthcare investment activity should reach approximately €10bn by the end of 2022 and perhaps even surpass them in 2023. Investments in the healthcare sector are broadly supported by long-term lease agreements and tenant covenants.
From an investment standpoint, healthcare remains a defensive asset class across the wider real estate spectrum. For this reason, it is appealing to investors as yields don’t generally swing as much as with other real estate asset types, event at times of turbulence.
