UK healthcare real estate transactions hit record £11.3bn in 2025

Healthcare real estate transactions in the UK reached a record £11.3 billion in 2025, according to global property adviser Knight Frank, approximately four and a half times the historic five-year average and the highest annual volume recorded since 2012.

Building on the strong momentum established in 2024, the sector experienced a wave of large platform acquisitions and portfolio transactions, with portfolio deals accounting for 89% of total activity during the year. Significant transactions included Welltower's acquisitions of Barchester and HC-One, PHP's merger with Assura, and Omega Healthcare's purchase of Four Seasons Health Care assets, accounting for a combined c. £8.5 billion of activity.

Investor demand remained concentrated in elderly care assets, which accounted for 80% of total transaction volume, compared with a five-year average of 77%. Primary care represented a further 16% of activity, reflecting continued investor conviction in sectors supported by long-term demographic trends and resilient income characteristics.

The UK market also saw a substantial increase in overseas investment, with international capital accounting for 74% of transaction volume. North American investors were particularly active, reflecting growing global recognition of the UK's healthcare real estate market and the attractive demographically-driven opportunities presented by an ageing population, constrained supply and inflation-linked income streams.

Healthcare REITs with a UK footprint now account for a combined £118 billion of global assets under management, up from £94.2 billion a year earlier, underlining the scale of consolidation and capital deployment taking place across the sector. Despite continued geopolitical uncertainty and a higher-for-longer interest rate environment, healthcare assets continued to deliver stable performance. Average annualised returns reached 7.7% at the end of 2025, up from 5.8% in the previous period, reinforcing the sector's reputation as a resilient long-term investment.

Julian Evans, Global Head of Healthcare at Knight Frank, said: "2025 was a landmark year for healthcare real estate investment, driven by a combination of demographic fundamentals, strong operator performance and growing institutional interest in the sector.

 "Much of the activity was concentrated in large portfolio and platform transactions, reflecting an increasingly mature and institutionalised market, with Knight Frank advising on £7.5 billion of such deals. We expect healthcare to remain firmly on investors' radars throughout 2026, supported by long-term demand drivers, attractive income characteristics and continued interest from both domestic and international capital."

Ryan Richards, Associate at Knight Frank, added: “In a market where consistency is increasingly hard to come by, the healthcare sector has continued to demonstrate genuine resilience. As M&A activity shows little sign of abating, volume will likely continue to be driven by portfolio and platform deals as established operators look to expand and new capital seeks market entry opportunities, drawn by the sector’s clear appeal.”