Healthcare sector grows in face of uncertainties
Enterprise investment schemes and specialist funds that focus on healthcare have seen at least a 7.2 per cent return in 2011, the Investment Property Databank UK Annual Healthcare Property Index has found.
Despite upheavals in the care sector and huge political reforms proposed for the sector, returns were 8.5 per cent for the primary care sector, which consists predominantly of GP surgeries.
However rental increases slowed to just 1.2 per cent, largely due to the uncertainty surrounding primary care trust reform.
John Hearle, chairman of healthcare property specialist Aitchison Raffety, said: “To continue encouraging investment the sector needs confidence but until the government finalises its reforms of the sector that is not going to happen.”
He said the National Health Service and its subsidiaries remain reliant on private investment for new building initiatives and the management of care homes.
Healthcare returns have trailed the commercial property sector for the second consecutive year as uncertainty has led to caution among valuers.
Government cuts, reforms and issues on the sustainability of the care homes sector are also creating uncertainty for investors in the short term.
The care home market saw the largest slowdown in returns, off the back of falling values.
Gareth Morgan, director of the care home division for Aitchison Raffety, said the sector would eventually offer good value for investors because of the UK’s ageing society.
Mark Dampier, head of research for Bristol-based Hargreaves Lansdown, said: “Many healthcare funds are top of the specialist table but I’m not a great fan of specialised funds. They will either be top or bottom.
“They are volatile so you have to be careful. You can buy normal funds and still get a lot of blue-chip healthcare in them. ”