Knight Frank is marketing two healthcare properties in Essex and Suffolk, offering long lets and ‘attractive’ RPI-linked reviews.

Genesis Cancer Care in Newmarket and Bourn Hall Fertility Clinic in Wickford are expected to draw widespread interest as investors and developers chase the high returns and longevity of the medical property market.

Bourn Hall

The Bourn Hall IVF fertility clinic was purpose built in 2018 to offer a full range of specialist IVF services.

Located in Wickford, Essex, it is well connected to major trunk roads and the mainline railway from London and is currently let to Bourn Hall Limited with a guarantee from Bourn Bioscience Limited providing a term-certain 21.8 years and 23.8 years to expiry.

The sale comes as IVF cycles increased by 9% between 2019-2012 to 76,000, with fertility treatment becoming increasingly popular due to underlying demographic, economic, and technological trends.

The property has a current passing rent of £332,226 per year, anticipated to increase to £366,757 at the next review in April 2027.

The rent also benefits from three-yearly reviews linked to RPI with a collar and cap of 2% and 5%

It also has strong ESG credentials and an EPC rating of B.

The building covers 10,836sq ft over three storeys, arranged over ground and two upper floors.

The first floor consists of a large reception and waiting area with several consultation rooms, clinical rooms, ultrasound scanning rooms, and administration offices.

The second floor provides procedure facilities, including a relaxing recovery area with several bays and a laboratory.

There are also 19 onsite car parking spaces and several public car parks within an easy walking distance of the clinic.

Genesis Care

Genesis Care’s cancer centre in Fordham Road, Newmarket, was purpose built in 2019 to provide a world-class diagnostics and cancer care centre.

The location has direct train services to Cambridge in just 20 minutes and a population of 1.1 milllion within a 45-minute drive-time catchment.

It is let to Genesis Cancer Care UK Limited, providing an unexpired term certain of over 13 years.

Founded in 2006, Genesis now operates 14 state-of-the-art specialist outpatient cancer centres across the UK, including sites in London, Oxford, Bristol, and Birmingham

In the year ending June 2023, the company reported a total revenue over £122m, an increase of 22% from the previous year.

The property has a current passing rent of £220,816 per year, with the next rent review due on 25 April 2028.

The rent benefits from five-yearly reviews linked to RPI (110.408% and 127.628%).

The property has four consultation rooms, a chemotherapy suite comprising five private pods for treatment, one procedure room, meeting rooms, and office space.

The ground floor comprises a large waiting room and reception area and a gym to aid patient rehabilitation.

There are also 27 onsite parking spaces.

An attractive market

In 2023, sentiment remained positive in the UK healthcare sector, with the view that healthcare’s fundamental drivers, such as demographics, long-term income, and ESG credentials, present an undeniable case.

2023 carried on 2022’s trend of general uncertainty due to market headwinds with investors stepping back to gauge markets.

However, 2023 saw a continued movement towards normality in operator trading which reinforced confidence in the sector, according to Knight Frank.

Total returns in the healthcare sector measured 4.4% in 2023, higher than many core property sectors.

And WAULTs averaged 25-30 years in the residential care and hospital sectors, supporting the derisking trend taken by investors moving from traditional sectors into alternatives.

In Knight Frank’s 2024 Wealth Report, healthcare was voted the second most in-demand sector, marginally beaten by the living sectors, suggesting that healthcare remains a standout choice on an absolute basis.