Germany’s housing market adjusts to permanent scarcity
Germany's housing shortage has now definitively crossed an important line. What was once treated as a cyclical undersupply
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Germany's healthcare system is reorganising itself faster than much of the property market has realised. Hospitals are retreating, medical demand is rising, and outpatient facilities have become the anchor asset of a sector once seen as too operational for mainstream capital. Transaction volume reached about €1bn in the first nine months of 2025, an increase of nearly 70% compared with the previous year.
At a recent expert discussion attended by REFIRE and featuring Hauck Aufhäuser Lampe, HIH Invest and Neworld, speakers highlighted the structural forces now reshaping the market. The shift reflects fundamental changes in care delivery. Hospitals are closing while demand continues to rise, creating gaps that outpatient facilities must fill. Already 97% of all treatment cases occur in outpatient settings, totalling around 580 million patient contacts annually. "When clinics close, there is no vacancy. The demand remains," said Carsten Demmler of HIH Invest. "Outpatient healthcare properties fill these gaps while offering stable conditions for investors and users."
Policy is accelerating the trend. The 2025 AOP catalog expansion shifted an estimated 400,000 procedures from inpatient to outpatient settings, and experts believe more than 20% of all surgical procedures currently performed in hospitals could move outpatient. Hybrid DRGs (diagnosis-related groups) are reinforcing that shift. "Next year, up to one million surgical cases could shift from inpatient to outpatient care," said Felix Rotaru of Hauck Aufhäuser Lampe.
A study by Rebmann Research, Hauck Aufhäuser Lampe and CBRE identified at least 3,441 outpatient healthcare properties nationwide with a potential market volume above €30bn. Hauck Aufhäuser Lampe expects up to 4,500 properties could ultimately qualify as investment grade.
Capital is flowing into medical centres, surgical centres and multi-speciality outpatient hubs. Most assets fall in the 1,500 to 5,000 square metre range, with average purchase prices around 18.5 times annual net rent, equivalent to typical values of roughly €8.7m. "Two-thirds of properties on offer are typical medical centres or outpatient healthcare centres," said Patrick Brinker of Hauck Aufhäuser Lampe.
Investors increasingly prefer diversified tenant mixes rather than single-operator dependence. Hauck Aufhäuser Lampe favours portfolios with doctors, therapists and healthcare service providers. "We have stable, highly indexed leases," Brinker said. Consolidation into larger group practices reduces vacancy risk. "The single practice covering 80 square metres operated by a single doctor no longer exists," Rotaru said.
Alexander Lackner of Neworld highlighted the predictability of outpatient surgery centres. "Demand for plannable, patient-oriented outpatient services is growing faster than the inpatient system can accommodate." Neworld co-founded an on-demand surgery operator aimed at closing what Lackner described as "enormous market potential and a clear gap in supply". Scheduled procedures free from emergency disruption increase operator productivity and support lease stability.
TSC Real Estate moved early. It launched a German special AIF in September backed by €100m of equity from a German insurer, targeting a total volume of roughly €200m once leverage is applied. In December, TSC acquired a medical centre in Bochum with nearly 2,000 square metres of space. "Outpatient segments offer high potential with fewer regulatory requirements than the inpatient sector," said Managing Director Berthold Becker.
Hauck Aufhäuser Lampe launched "HAL Soziale Infrastruktur Deutschland II" with a first closing exceeding €30m and a target volume of €150m to €250m. In November, the fund acquired the Medi+Vital centre in Neunkirchen, offering 3,000 square metres across 13 fully let units. "We plan to allocate the seed capital in full before year-end," Brinker said. HAL is structured as a pure equity fund to improve capital adequacy for banks and insurers under CRR III and Solvency II. It targets annual distribution yields above 4.75 percent.
Geographically, the 3,441 identified outpatient properties are unevenly distributed. On average there is one facility per 24,141 inhabitants. Eastern states show higher density per capita. Major metropolitan regions such as Berlin and Hamburg have particularly high concentrations, while rural regions reveal significant infrastructure need and correspondingly strong investment potential. Prime yields remained stable through the third quarter at 4.75 percent for outpatient medical care facilities, 5.1 percent for nursing homes and 4.5 percent for senior assisted living.
Although the structural momentum is strong, growth depends heavily on political execution. Speakers at the discussion stressed the need for faster permitting, more flexibility and explicit support for new care models. The pandemic highlighted how strained Germany's healthcare infrastructure remains. Despite the shift toward outpatient care, many regions still lack the buildings required for modern service delivery. Differing state regulations, QNG requirements and construction cost inflation continue to slow newbuild pipelines. Operator risk remains highest in the inpatient sector, where labour costs and regulatory pressure weigh on balance sheets. The clearest momentum therefore remains on the outpatient side.
"The outpatient sector is systemically important, but infrastructure is still lacking in many places," Demmler said. He expects steady growth rather than dramatic acceleration in 2026. Lackner looks further ahead. "The big push will come towards 2030 to 2035. But the course is being set today." CBRE's European Investor Intentions Survey found that 62 percent of investors plan to increase healthcare allocations, supported by demographics, hospital reform and efficiency gains.
In REFIRE's view, the market change is now very apparent. Outpatient healthcare real estate is shifting from alternative to quasi-core, supported by demographic need, political reform, operator consolidation and the migration of procedures out of hospitals. Indexed leases and low vacancy underpin income stability. The investable universe is expanding through surgical centres, integrated medical hubs and multi-tenant care clusters.
Opportunities are strongest outside the top seven cities, where undersupply and ageing are most acute. Early movers such as HAL REIM and TSC Real Estate are positioning ahead of a larger expansion phase expected in the early 2030s. For investors seeking defensive, inflation-protected income, outpatient healthcare facilities now stand out as one of the few segments where supply, demand and public policy are all moving in the same direction.
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