Social Infrastructure Investment: A European Focus – June 2015

by Justin Beardon

  • 26 Jun 2015
  • INF

Since 2008, Preqin’s Infrastructure Online service has reported over 950 completed social infrastructure deals, with 77% of this activity taking place in Europe worth an estimated €95bn. Social infrastructure can be broadly be said to include long-term physical assets that facilitate social services – typically schools, medical facilities, state or council housing, courthouses and prison buildings among others.

Within Europe, the number of social infrastructure deals completed increased year on year from 51 in 2008, to a peak of 166 in 2012; 91 transactions are known to have taken place in 2014, although it is expected that this figure will increase as more completed deals come to light. However, the estimated aggregate deal value of Europe-based social infrastructure deals has fluctuated since 2008, most notably when the estimated aggregate deal value grew 102% from 2010 to 2011 before declining by 50% to 2013. In 2014, estimated aggregate deal value stood at €10.8bn, representing just a 10% growth on the 2008 figure.

Interestingly, the UK represents the vast majority (81%) of all social infrastructure deals completed on the continent between 2008 and 2015 YTD, followed by France (6%), Germany (3%) and the Netherlands (3%). Over 60% of these social infrastructure deals involved secondary stage assets, while greenfield and brownfield assets accounted for 26% and 13%, respectively. Educational buildings were the most favoured target for social investment, representing 38% of all social deals in this period. This was followed by hospitals and healthcare/medical facilities, representing 30% of transactions between 2008 and 2015 YTD.

There have been a number of recent notable transactions in the European social infrastructure market; in March 2015, CPP Investment Boards acquired Liberty Living, a London-based student accommodation provider for $2.1bn. Another notable deal was the €520mn acquisition of Schleswig-Holstein University Hospital in September 2014 by a consortium comprising BAM PPP, PGGM, VAMED and DIF Infrastructure III.

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