**2.1 Dominant institutional investors in the Netherlands**

The largest market share (Healthcare Real Estate Market 2023) in transaction volume is achieved by institutional investor with a 71% share (**Figure 13**). They invested 85% more in 2022 than in 2021 [22]. The three most substantial investments by institutional investors in 2022 were:


**Figure 12.**

*Healthcare real estate investments 2019-2022 in million euro's [22].*

#### **Figure 13.**

*Composition of healthcare real estate transaction volume by nationality of buyer 2022 [22]. Editing Veuger 2023.*

Orpea. Orpea decided, due to financial circumstances, to sell part of the portfolio through a sale & lease back transaction [23].

• The acquisition of 144 inpatient care units and 149 care homes for the Bouwinvest Healthcare Fund in The Hague [24].

#### **2.2 Possible stabilization**

After an explosive increase from 2016 through 2022, a number of factors are now visible that may stabilize investment in healthcare real estate. This is possible due to three developments (**Figure 14**) [22]:

1. Interest rate hike felt in second half of 2022: Dutch investors invested in opportunities created by rising interest rates on bank financing. As a result, investors *Doubling of Dutch Healthcare Real Estate Investments in 2022 Compared to 2016 DOI: http://dx.doi.org/10.5772/intechopen.112326*

**Figure 14.** *Composition transaction volumes by construction status 2022 (Capital Value 2023). Editing Veuger 2023.*

became more dependent on outside capital. International investors showed signs of becoming less active in the healthcare real estate market in the second half of 2022, as did listed healthcare real estate investors due to low stock market levels. Due to possible uncertain market conditions, fewer new (institutional) investors may enter the healthcare real estate market in the coming period.

2. Decrease in transactions: looking at the stable transaction volume over 2016– 2022, it does appear that the number of transactions decreased by 20% in the last two years and became most visible in the second half of 2022 [25, 26]: the fourth quarter of 2022 saw a total of 20 transactions compared to 40 in 2021 and 71 in 2020. The average investment per transaction did increase by an average of 10.9 million euros. In comparison, in 2020 this was still 8 million euros per transaction. These figures are heavily influenced by two trends, though: (a) in 2022, almost 90% of the number of transactions took place within a range of up to 20 million euros, collectively accounting for about half of the total transaction volume, and (b) in addition, there are several large portfolio transactions every year. In 2022, there were nine transactions larger than 30 million euros that collectively account for over 43% of the total transaction volume [22]. In addition, supply is stagnating (Real Estate Market 2022).

3. Less new construction: The Dutch Health Care Institute [27] indicates that there will be a 70% increase in acute nursing home admissions in 2022, in absolute numbers 4737 people. This necessary increase cannot (yet) be seen in the increase of new construction and/or transformation and shows a slight decrease at this time. In addition, the transaction volume shows only a 2% increase compared to 2021. The feasibility of new construction projects in healthcare real estate came under further pressure due to the confluence of several market developments: (a) construction costs that rose again in 2022 and (b) declining initial yields due to the rise in interest rates. With the announced rate decrease of the Normative Housing Component (NHC) [28], the pressure on housing revenues is increasing.

Kuipers, director of healthcare real estate Capital Value [22] argues that pushing ahead with new construction is essential right now: "*Healthcare institutions are seeing*  *their capacity decrease due to the postponement of new construction projects and staff shortages, while waiting lists continue to grow. New healthcare real estate and smart buildings offer an opportunity for implementing more efficiency in healthcare. These include changes in floor plans, hybrid buildings and new techniques in home automation. Sustainability is also becoming a major focus in the healthcare sector. This also applies to investors and corporations in acquisitions. There is therefore more and more common ground between care institutions and market parties to work together on a future-proof stock."*
