Sébastien Berden, COO Healthcare, Cofinimmo
Healthcare will no longer be lumped with all other alternative asset classes but it is set to become a mature, standalone segment of the market, Sébastien Berden, COO Healthcare, Cofinimmo, told Real Estate Day.
‘The sector is booming and it is attracting more institutional interest,’ he said. ‘Demographics is the big driver, but the lack of capacity and adequate infrastructure in many European countries is also a factor.’
Cofinimmo, a Belgian company that had traditionally invested in offices, has changed its strategy in order to focus on healthcare because they believe the sector has huge potential in Europe.
‘Our ambition is to become the first pan-European healthcare REIT,’ he said. ‘In order to reach our goal we have a double strategy of diversification in terms of sectors, covering the whole spectrum from primary care to acute care to nursing homes, but also in terms of geographies’.
Belgium is still the biggest market for the group, but Cofinimmo has expanded into the Netherlands, France and Germany, where it still has ‘a lot of potential to grow further’, he said. The group is now actively looking at other European countries as well to expand its footprint.
‘We only invest in healthcare assets and every country is different, so we have a team on the ground in every single place,’ Berden said. ‘First we look at the demographics, then at the quality of the operator and then at the location and the real estate’.
It is hard work to develop the necessary specialised know-how in every country, he said, but ‘once you have gained that knowledge it is great. It creates a high barrier to entry for competitors’.
Operator risk, a pitfall of the sector, is mitigated by careful financial analysis, Berden said: ‘We need to understand and evaluate the operator’s business plan. We believe the first driver of the quality of healthcare is the quality of the operator’.
About half of Cofinimmo’s investors are private individuals and the rest are institutions. ‘They all want stable long-term returns and healthcare matches that requirement,’ he said. ‘We generate a high dividend yield’.
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