The UK healthcare property market is on track for a record annual deal volume of £12bn in 2025, according to a Knight Frank report.

The figure is more than treble the long-term yearly average and is driven by a leap in investor appetite for the sector from cross-border family offices, insurance firms and REIT investors attracted to the sector’s countercyclical characteristics, the firm said.

A total of £7.85bn of deals had been transacted by the end of Q3, the report said, with Primary Health Properties’ £1.8bn takeover deal for Assura set to be the largest deal in the fourth quarter.

Total investment volumes in 2024 were £3.2bn, the highest annual figure on record but set to be eclipsed by 2025’s totals. Five-year average annual transaction volumes in the sector stand at £2.4bn.

Knight Frank associate Ryan Richards said this year’s “record UK healthcare property deal volume has been fuelled by a high volume of consolidation and M&A in the sector, with established domestic operators and international investors each seeking to capitalise on the efficiency gains available from whole-platform deals”.

He added: “While PHP’s acquisition of Assura has gained the most attention, a number of significant whole-company deals in H2 will cap off a highly active year for investment into the asset class.

“The trend toward platform plays looks set to continue into next year, signalling that we may be in the midst of a multi-year boom for capital inflows to UK healthcare.”

Other major deals this year include US-listed care home investor CareTrust’s £448m acquisition of Care REIT, in its UK market debut, and Foundation Partners’ £100m deal for Hartford Care, another example of the rush of US capital into the sector.

Julian Evans, partner and global head of healthcare at Knight Frank, said: “Looking ahead to 2026, persistent uncertainty in global markets is set to channel further institutional capital into defensive and countercyclical sectors, particularly those offering a prominent operational component that provides opportunities for value creation through active asset management.

“The UK healthcare property market is well-positioned to capitalise on this demand, building on the record level of investment into the sector in 2025.”