Savills: Over £12bn invested in UK healthcare real estate in 2025, the highest on record
International real estate advisor Savills reports that more than £12bn of capital was deployed into UK healthcare real estate in 2025, the highest annual total on record. The advisor states that investor demand extended across the full spectrum of healthcare last year, from curative care to care homes.
Care Home investment volumes in 2025 were fuelled predominately by US REITs, supported by their lower cost of capital and ability to utilise RIDEA (management contract) structures. Savills states that in 2025, US REIT Welltower alone deployed over £7bn in the sector, including one of the largest care home transactions ever completed globally, with its acquisition of Barchester Healthcare (284 elderly care assets including developments) for £5.2bn, structured under long-term RIDEA and triple-net lease arrangements. Savills expects the UK to remain Europe’s most attractive care home real estate market in 2026, supported by a large and resilient private‑market, strong underlying demand, and limited new supply entering the market.
There was also significant activity in the Hospital segment last year. In November 2025, Blue Owl Capital was reported to be in talks to acquire a 12-asset UK private hospital real estate portfolio, operated by Spire Healthcare under long leases, from Malaysia’s Employees Provident Fund (EPF), in a potential c. £1.3bn transaction. While the transaction was reported as targeting completion before year-end, it has not been publicly confirmed as closed. If executed, it would mark Blue Owl’s entry into UK healthcare real estate and further underline investor appetite in the UK private acute hospital market, against a backdrop of growing NHS outsourcing and strong private patient demand.
Savills also highlights recent hospital transactions including acquisitions by Bupa and the sale of Practice Plus Group’s secondary care business to Narayana Health for c.£189m in October 2025, as evidence of renewed strategic focus on privately delivered acute care services.
Despite healthcare development activity remaining subdued since 2022, constrained by elevated construction costs, planning challenges, and slow adjustments in land values, Savills states that conditions have improved relative to 12-18 months ago. Construction costs have stabilised and debt markets have strengthened. In the Care Home sector, improving operational performance, including higher occupancy and stronger profitability, is increasingly supporting development viability, particularly in prime markets. Average quoted weekly fees for personal care reached £1,302 in Q3 2025 (up 8.5% year‑on‑year), while nursing care fees averaged £1,696 (up 8.3%).
Caryn Donahue, head of Healthcare and Senior Housing at Savills, says, “The UK remains the primary focus for US capital and we also expect UK domiciled healthcare REITs to become more active as macroeconomic conditions improve. The scale and speed of US REIT deployment in 2025 has cemented the UK’s position as the leading destination for cross border capital in the Care Home sector, and we anticipate strong competition for high quality assets and portfolios again in 2026.”
Tom Atherton, strategy & market intelligence manager at Savills, adds, “We are seeing growing interest and opportunity across the healthcare spectrum. Care Homes, Hospitals, and Primary Care assets all present compelling investment prospects for 2026, driven by strong demand for services and continued constraints on new supply.”