Newcore Makes First Buy In £100M Healthcare Real Estate Push

Social infrastructure specialist Newcore has bought a purpose-built primary healthcare facility in Headcorn near Maidstone, Kent, as part of a £100M investment drive in the sector. 

The asset, its first acquisition in the clinical health sub-sector, was acquired on behalf of its latest value-add fund, Newcore Strategic Situations V, and the company said that in all it plans to commit £100M to clinical healthcare.

This investment will take place over the next two years and is expected to include the acquisition of further general practice surgeries for the NSS V fund and its new income fund, the Newcore Social Infrastructure Income Fund.

The 7,700K SF facility at Headcorn has two floors and is 80% leased to a GP partnership, while the remainder of the space is taken by pharmacy Freshname. The site also has consent for expansion by an additional 646 SF.

Newcore, which was founded in 2011 and is a B-Corp, has previously invested in clinical healthcare categories such as renal dialysis, pathology and medical research, but this acquisition is the first time it has invested in a GP surgery building.

In a release detailing its entrance into the clinical healthcare sub-sector, Newcore said that the purchase at Headcorn “represents a recognition of the sector’s demographically supported demand-drivers with the UK’s ageing population, as well as the defensive nature of the asset class.”

While the healthcare property market has traditionally been resilient in periods of economic downturn, in 2023 transaction volumes slumped to £811M compared with £1.8B in 2022, according to Savills.  

“There is perhaps an unusual window of opportunity for buying as traditional healthcare REITs are generally on the sidelines, being constrained by higher interest rates and continued share price-to-NAV discounts,” Newcore Capital CEO Hugo Llewelyn said in a statement.

Bisnow is running a Healthcare Real Estate Outlook event on 8 May in London, which will examine whether the demand for healthcare real estate will remain strong, where investors see the hot spots for the highest return on capital and the future pipeline of healthcare real estate schemes in the UK.