Outpatient shift lifts medical centres onto institutional investors’ radar

Medical centres recorded the strongest growth of any healthcare real estate segment in Germany in 2025. Transaction volumes for outpatient healthcare properties rose 121% to €170m, according to CBRE, lifting the sector out of niche territory and firmly onto the radar of institutional investors. The increase came as total healthcare real estate investment reached €1.2bn, up 18% year-on-year and marking a second consecutive recovery after the 2023 downturn.

Nursing homes remained the largest segment, accounting for €630m of transactions, while senior living contributed around €180m and clinics and rehabilitation facilities €150m. Medical centres, however, delivered by far the steepest growth rate. The shift reflects structural changes in healthcare delivery that are already under way and now being reinforced by policy reform, demographic pressure and improved price alignment between buyers and sellers.

Hospital reform accelerates the outpatient shift

The renewed momentum in medical centre investment coincides with Germany’s Krankenhausreform, which came into force in January 2025. The reform concentrates complex treatments in specialist hospitals, reduces the role of general hospitals and expands incentives for relocating suitable procedures to outpatient settings. Savills estimates that up to 20% of Germany’s hospitals could ultimately close or be repurposed, materially increasing demand for modern outpatient infrastructure. 

The trend did not begin with the reform, but the legislation sharpens it. Germany’s long-running Ambulantisierung agenda has already redirected procedures that do not require overnight stays into community-based facilities. The 2025 reform broadens the list of treatments eligible for outpatient reimbursement. Combined with an ageing population and rising chronic disease, this is creating structural, not cyclical, demand for medical office space.

Multi-speciality outpatient centres, known as Medizinische Versorgungszentren (MVZs), sit at the centre of this transition. Their number rose from 2,240 in 2011 to 4,897 in 2023. Many require larger, purpose-built premises than traditional solo practices, driving demand for dedicated medical centres. Savills estimates that Germany now has around 8,000 buildings functioning as such facilities, although most remain small, fragmented and privately owned.

Institutional interest grows, but scale remains limited

Germany is Europe’s most developed market for medical office buildings. Its mixed healthcare system, combining public, non-profit and private providers, supports a large base of self-employed physicians who lease space rather than own property. That landlord–tenant structure underpins medical centres as an investable asset class, unlike in France or the UK, where healthcare delivery models limit independent outpatient buildings.

The main constraint is not demand, but scale. Ownership remains fragmented, dominated by single-asset holdings held by families or small private landlords. This has capped transaction volumes and slowed institutional deployment, even as occupational demand has stayed firm. After peak volumes in 2021, activity cooled in 2023 and 2024 due to higher interest rates and limited portfolio supply, rather than weakening fundamentals.

The Netherlands offers a useful comparison. It is Europe’s fastest-growing outpatient market, driven by insurer-led patient steering and a rapid expansion of independent clinics. For Germany-focused investors, however, the key point is that Germany combines deeper inventory with earlier institutionalisation, making it the natural entry market for larger capital allocations.

Why investors find medical centres easier to underwrite

Institutional interest is supported by characteristics that distinguish medical centres from more operationally exposed healthcare assets. Leases typically run 10 to 15 years, tenant demand is tied to essential services rather than discretionary spending, and buildings host multiple practitioners and service providers, reducing single-operator risk. While fit-outs are specialised, tenant turnover is low and income volatility limited.

Savills estimates average European medical office building yields at around 6.5%, compared with 5.4% prime yields for nursing homes and around 4.75% for outpatient healthcare facilities in Germany. CBRE notes that the price correction for existing assets is largely complete, allowing transactions to proceed on more realistic terms. Whether yield compression emerges in the premium segment will depend on greater transaction depth and renewed development activity.

Capital is beginning to respond. Funds including HIH Invest, TSC Real Estate Group and HAL REIM have launched vehicles targeting the sector, but deployment remains constrained by the lack of investable portfolios. Most activity in 2025 involved selective, single-asset transactions, with investors either aggregating assets or waiting for consolidation among smaller owners.

Looking ahead, CBRE expects several larger transactions delayed from last year to complete in early 2026, with selective deals continuing to drive the market. Political uncertainty remains a headwind, but demographic arithmetic is unavoidable: within ten years, one in four people in Germany will be aged 67 or older.

For investors, the opportunity is not about chasing a short-term surge, but about positioning early in a segment where demand is structural, supply is constrained and the path towards institutional maturity is increasingly visible.