Healthcare leads capital markets activity in 2025
Specialist business property adviser, Christie & Co, has released its Capital Markets Outlook as part of its Business Outlook 2026 report, highlighting key trends shaping investment activity across operational real estate sectors.
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With the economic and geopolitical backdrop remaining mixed throughout 2025, operational real estate has emerged as a core focus for a diverse range of investors. Increasingly, capital is being deployed into needs-driven living sectors, underpinned by long-term demographic trends and structural demand. We expect these themes to continue in 2026 as investment strategies evolve away from traditional asset classes.
Investor sentiment
Investor sentiment in 2025 was mixed but marked by significant activity and evolution, particularly in healthcare. Institutional investors operating at the sharper end of the yield spectrum adopted a selective approach and most of the activity in the UK market has been when yields have reached 6% to 7% or above. At these levels, demand was strong from UK, European and US REITs, family offices, international institutions, and private high-net-worth individuals.
Healthcare is leading the market
UK healthcare has been a standout sector, with 2025 being a record year for investment volume. This has been fuelled by significant investment from US REITs led by Welltower, which concluded a series of mega transactions in Q4, including Barchester Healthcare for circa £5.2 billion and HC-One for £1.2 billion.
A prime example of the sector’s growth was through Christie & Co’s pivotal role in Omega’s acquisition of the remaining Four Seasons portfolio in April, which involved 45 care homes across the UK and Jersey, for a valuation of £241,750,000. This was one of several major deals that Christie & Co helped broker.
Hotels and alternative sectors
The UK hotel market entered 2025 following a strong 2024. However, the absence of large portfolio transactions in 2025 resulted in lower headline figures, despite robust single-asset activity and renewed interest from domestic investors. Liquidity remains healthy, and Christie & Co anticipates renewed optimism in 2026.
Beyond healthcare and hotels, Christie & Co expanded its investment activity in childcare, medical, and retail and leisure sectors during 2025. These markets typically involve smaller lot sizes and attract a mix of institutional capital for modern assets and private investors, including sector operators. Early years childcare and medical assets were particularly active, with yields in the 7 -10% range proving attractive to a broad buyer base. We expect this trend to continue throughout 2026.
Mike Hodges, Managing Director - Capital Markets at Christie & Co, comments: “Reflecting strong activity, we have expanded our Capital Markets team with Dan Griffiths rejoining Christie & Co as Director after eight years away, having previously worked at Alpha Real Capital, Rothesay Life and Maddox Capital Partners. Jonathan Watson moved into a new role as Director - Investments, working across the Medical and Retail & Leisure sectors. We are looking forward to a strong 2026 with a number of exciting projects in the pipeline.”
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