The Medical Office Building (MOB)

MOBs are specialised healthcare real estate premises that are predominantly used for delivering ambulant medical care for patients as well as for accommodating additional medical and non-medical facilities, including healthcare retail premises, e.g. pharmacies, medical supply stores, opticians, laboratories and restaurants.

These modern facilities are an emerging core asset class within the German healthcare real estate landscape – soon to become an institutionalised sector similar to that in the United States, the United Kingdom and Australia.

The German healthcare market is the largest in Europe with a very positive economic outlook due to demographic developments, an ageing population and rising healthcare expenditure.

Market challenges are resulting in new forms of healthcare services operating platforms, with MOBs becoming the real estate vehicles that meet the stringent quality requirements of physicians and patients in relation to modern accommodation facilities.

CORPUS SIREO International S.à.r.L. (“CSINT”), through its healthcare team which is the leader in this particular market, is taking the initiative in institutionalising this asset class and in doing so is offering an investment opportunity for international and national institutional investors to invest within the German MOB segment.

By acting as a “first mover” in this emerging real estate sector within the institutional marketplace, an investor is able to:

  • Generate attractive returns from long-term lease terms and a stable tenant structure,
  • Capture strong annuity income with capital value growth,
  • Establish a modern portfolio with excellent locations, with assets located on health campuses as well as in CBD locations.

MOB Characteristics

Properties of this kind typically accommodate specialist medical practices as well as medical service providers such as opticians or physiotherapists. MOBs are a further phased progression of traditional medical practices, other examples of which are combined medical practices and health centres.

An MOB tends on average to occupy between 2,000 and 8,000 square meters of NLA, with 10 - 15 tenants, including healthcare retail premises on the ground floor. Most medical office buildings are located in cities with populations of more than 30,000, either as a stand-alone building or adjacent to a hospital campus.

Long lease terms of 10 years and more make investment in this real estate segment highly interesting for safety-conscious, income-driven investors. Sufficient parking facilities, excellent transport connections, no interference of magnetic fields as well as good and barrier-free access complete the profile of a modern MOB.

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Investment Opportunity

This investment opportunity has arisen with the deregulation of the German healthcare sector – which is the largest healthcare market in Europe – with the shift from in-patient to ambulatory care, together with the growing emergence of the private sector role in the provision of healthcare services to a demanding consumer population.

With the German MOB segment still in its infancy, now is the right time to establish an investment portfolio of MOB assets and act as a “first mover” in this emerging real estate sector within the institutional marketplace. The targeted assets have demonstrable positive characteristics; they are modern, flexible medical office buildings with a spread of healthcare tenants providing long-term leases with favourable indexation clauses.

Growth prospects are positive across Germany’s entire healthcare market, and specifically the segment of MOBs will keep expanding.

  • Current number of MOBs is rising but not sufficient for demand.
  • Development of further facilities is required in order to satisfy current demand.
  • MOBs are communal healthcare destinations and an integral element of German healthcare delivery.
  • MOBs are becoming an institutionalised asset class as in the USA, Australia and UK.

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Markt Trends

Germany’s healthcare real estate market has positive long-term perspectives, driven by the country's ageing, yet wealthy population as well as by strong government financial support backed up by the country’s compulsory health insurance program.

The recent changes within the regulatory framework for the provision of medical services have further enhanced opportunities within the sector for the growth of independent medical service platforms. The higher demand for professionally managed properties will present opportunities for real estate investors.

The provision of German healthcare services is seeing a market shift from in-patient care to ambulatory care. Advancing technological change and the increasing number of ambulatory care professionals are further encouraging the establishment of new service platforms that focus on care delivery, creating the new tenant base for the emerging medical office building segment.

Investors can be reassured by the regulatory protection afforded to statutory health insurance professionals, which limits tenant competition. Further, the established referral pattern between tenants creates synergies as well as dependencies, with patient demand remaining local.

Evolving German healthcare system harnessing investment opportunities in the MOB segment.

  • Increasing healthcare expenditure (per capita and as a percentage of GDP)
  • Shift from in-patient care to ambulatory care (faster sector growth (expenditure/employees), merging of services, advancing technology)
  • Political reforms (new forms of care delivery, focus on cost control)

Source: Destatis 2013, Deutsche Apotheker und Ärztebank, German Federal Statistical Office 2010

Requirement profile

The CORPUS SIREO fund invests in health care real estate for providing ambulant care (combined medical centers and practices, medical care centers, health centers) in major city locations in Germany.

Between 70 and 80% of the properties are established existing properties, and the other 20 to 30% are expected to comprise project developments with a minimum letting ratio of 60 to 70%.

The volume of each individual property is expected to be between € 5 and 35 million. The fund is targeting an investment volume of € 300 million.


  • Germany
  • Western and Eastern Germany
  • Positive demand and competition situation
  • Metropolitan areas with a very central nature and sustainable population development and / or access to hospital
  • Catchment area > 50,000 inhabitants

Property type / year of construction / Property condition

  • Existing properties (< 10 years) or modernised old buildings (modernisation < 10 years)
  • Project developments with a minimum letting ratio of 60 to 70%
  • No structural vacancy level
  • No backlog of maintenance and repairs

Tenancy agreements

  • Sensible mix of tenants
  • Double-net agreements
  • Indexation in line with overall market
  • Average remaining term of tenancy agreements: minimum 8 to 10 years

CORPUS SIREO International S.à r.l.

CORPUS SIREO is Germany’s leading real estate manager with assets under management of € 15.9 billion, a direct result of our client-focused management philosophy. CORPUS SIREO provides a comprehensive and flexible range of services for national and international investors, banks and loan servicers as well as corporate real estate owners.

Within the framework of our investment management platform at CORPUS SIREO International S.à.r.l. (“CSIM”), we structure bespoke investment strategies and design need-based investment vehicles for German and international investors.

Within CSIM there is a dedicated healthcare team of 10 specialists with many years of market experience and in-house investment management and asset management expertise in the German healthcare sector, currently managing Health Care Funds I and II with total AuM of approx. € 750 million on behalf of German institutional investors, and forming the largest healthcare real estate management platform for institutional capital in Germany.

The team, led by Marc-Philipp Martins Kuenzel, has a successful track record in healthcare investments and includes specialists for the acquisition and disposal of assets, as well as commercial and technical asset managers.

Our investment management services on behalf of the funds include the acquisition, optimisation and leasing of properties; we also handle commercial and technical property management, ensure optimum timing of property sales and also set appropriate prices to maximise value.

Our specialist fund management teams have extensive knowledge across the areas of project development and asset management, and also have sector-specific experience covering the key commercial, residential and health care real estate sectors.

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