US$2bn investment in healthcare infrastructure

Some US$200bn looks set to be invested in the global healthcare infrastructure sector over the next five years, according to research by Octopus Group. Asian investors are the most active in the market.

Around 100 institutional investors with a collective of US$6.8 trillion of assets under management were surveyed by the Octopus Group.

They plan to increase their stake in the asset class by more than half from 6.1% to 9.5% by 2023, and over half (56%) of respondents said ageing demographics were a key driver of their interest in retirement communities, care homes and GP surgeries.

According to the research, Asian investors are the most active in the market, with an average allocation of 10.6% of their portfolio to healthcare infrastructure investments – expected to rise to 12.1% over the next five years.

The report found 60% of global investors had investments in the UK – and despite Brexit uncertainty, more than seven in ten said they would still invest there.

Almost two-fifths (39%) of investors reported between 10% and 15% returns on assets over the past five years – with strong returns expected to continue, the report said.

However, just under half (45%) pointed to a lack of healthcare sector-focused resources within their own organisations and 44% said government and regulatory barriers contributed to market uncertainty.

Benjamin Davis, chief executive 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.’

‘Globally there is a significant lack of accommodation to cater to this varied group’s needs, and this demographic shift is creating a strong investment opportunity for institutional investors,’ he said.