Where to invest
Care Home investment remains most attractive in the UK, with strong interest also building in Spain and selected opportunities emerging in Germany. Through 2024 and in 2025 to date, the UK Care Home sector received the greatest volume of capital inflows among the core markets, with over €2.7 billion invested.
This has shown the resilience of the UK market, at a time when Germany, the largest market and previous investment leader, has faced challenges. In the UK, care fees have increased significantly over the last five years, driven by the private-pay segment, making certain developments more financially viable as there is a greater capacity to pass on inflationary costs to end users. US investors were drawn to the market by the ability to structure WholeCo deals and benefit from these price increases.
Going forward, investors are highlighting the UK as Europe’s most attractive market, driven by a diverse range of sizeable real estate portfolios, strong fee uplifts, and relatively low bed supply compared to other mature markets.
Notably, around 70% of UK Care Home stock is over 20 years old, with more than 25% lacking en-suite facilities and 70% not having full wet rooms. While there is opportunity to revitalise ageing supply, lower-end assets are often not fit for purpose, further strengthening the case for new development. However, development has its challenges and is constrained by a shortage of sites with planning permission and a slowdown in planning applications.
At the same time, rising construction and staffing costs add further pressure to the equation. Despite these challenges, the UK remains a key market for expansion, offering both scale and long-term growth potential.