Market Overview

2025 marked a year of consolidation and strategic repositioning for the German healthcare real estate market.

Demographic shifts and rising life expectancy continue to drive stable demand for care and housing solutions for older adults. The supply landscape is evolving accordingly, and while the number of fully inpatient facilities is slightly declining, assisted living continues to expand. The operator landscape is characterised by a mix of established non-profit providers, regionally rooted family-run businesses and increasingly active private operators expanding their footprint through growth and consolidation.

Financing conditions remained tight. Rising interest rates and construction costs led to a noticeable slowdown in new developments. At the same time, ESG compliance and operator quality became more central to investor decision-making. Lenders were cautious, favouring projects with clear regional demand, long-term demographic stability, and sound economic fundamentals.

The transactional market showed resilient demand for existing assets with stable cash flows, and care homes remain a cornerstone of the system. Investors are focusing on facilities with professional operator structures, high occupancy, and sustainable building quality. Prime yield for care homes stands at 5.2%. The transaction volume in the German healthcare real estate market was estimated at €1.2 billion in 2025.

Assisted living continues to gain traction across Germany. Demand is driven by older adults seeking autonomy, safety, and social inclusion, while institutional interest is rising due to favourable regulatory conditions and the segment’s integration potential into mixed-use developments. As of 2025, Germany has approximately 8,200 assisted living facilities. Around 62% of these facilities are operated by non-profit organisations, reflecting the sector’s deep social anchoring and long-standing community relevance.

Marlon Schramm

Head of Healthcare Germany

This distribution reflects a structural shift in the sector: private entities are gaining ground due to their agility in expanding, access to capital, and ability to adapt to regulatory and operational pressures. Non-profit providers, traditionally backed by welfare organisations, continue to play a stabilising role, especially in rural and underserved regions.

Market Predictions for 2026

Workforce strategies and digitalisation will enhance resilience. Care staff will become a key resource as innovative recruitment, retention, and digital tools strengthen operational stability and future viability.
Integrated community concepts will gain relevance as care is embedded into holistic living environments, and new synergies emerge between healthcare, housing, and public infrastructure.
Capital strategies will diversify across the market as investors and operators pursue core-plus models with stable structures, or value-add approaches through refurbishment, repositioning or operator change.
ESG-compliant new developments will grow in appeal as investors favour future-proof concepts with long-term operator partnerships and sustainable building standards.
Assisted living will outpace market growth as demand for flexible housing with care options rises. Operators will expand offerings along the continuum of care.