This article first appeared in City & Counattempt, The Edge Malaysia Weekly on December 15, 2025 – December 21, 2025
Medical office buildings (MOBs) have come into the spotlight as Europe’s next investable real estate sector, driven by an increase in its elderly population, supportive regulation, altering healthcare necessarys, outpatient care reform and institutional investor interest in the region.
According to Savills Operational Capital Markets (OCM) European Medical Office Buildings Spotlight 4Q2025 report, a mix of factors including long-term demand, stable tenant profiles and growing policy support has positioned the outpatient-centred property type as an in-demand investment opportunity in Europe.
However, this asset class is not new. The report highlights that MOBs have long been established in the US. “MOBs in the US have proved to be a defensive, income-stable real estate sector, with demand for healthcare services largely insulated from economic cycles,” it declares.
Even during downturns such as the 2008 global financial crisis and Covid-19 pandemic, MOBs in the US managed to retain high occupancy levels and steady net operating income, the report points out.
In Europe, the model is newer and its availability varies from counattempt to counattempt. This report explores the characteristics of MOBs and the investment potential.
What is an MOB?
According to the report, MOBs differ from traditional hospitals or clinics in both purpose and structure. An MOB is a commercial property designed to accommodate outpatient healthcare services, typically those that do not require an overnight stay.
The report adds that these buildings typically houtilize general practitioners, specialist doctors, diagnostic centres, dental surgery clinics, physiotherapy practices, pharmacies, day-surgery units and other healthcare tenants that rely on continuous patient flow and specialised fit-outs.
Unlike hospitals, where the real estate ownership and healthcare operations are often integrated, MOBs operate on a landlord-tenant model, declares the report. Doctors, operators and outpatient service providers lease space in the building, usually with 10- to 15-year contracts.
These spaces require special layouts such as consultation rooms, shared waiting areas, treatment suites and areas built to accommodate medical equipment. MOBs are also often located near hospitals or high-traffic medical hubs.
“By decentralising healthcare delivery and reducing pressure on larger hospitals, MOBs can play a key role in efficiently addressing community healthcare necessarys,” declares the report.
Market drivers
The rise of MOBs in Europe is due to the shift in Europe’s rapidly ageing population, declares the report. It elaborates that the number of people aged 65 and above across the European Union is projected to rise from 97 million in 2024 to nearly 130 million by 2050.
The most significant increase is expected among those aged 75 to 84, which will increase by around 50%, while the population aged 85 and above is expected to nearly double.
The report declares the prevalence of chronic conditions such as diabetes, cardiovascular disease and neurodegenerative disorders, has led to greater demand for continuous and preventive care.
Healthcare systems across Europe are facing rising capacity pressure and hospitals are burdened by growing demand, workforce shortages and the high cost of inpatient care, it adds. As a result, governments and insurers are increasingly coming up with suitable medical procedures that can be conducted outside of hospitals and in community-based outpatient settings.
The report declares the recent pandemic was a catalyst for structural modify in healthcare delivery, accelerating trfinishs that favour the development of MOBs. “The pandemic placed unprecedented pressure on hospital capacity and underscored the necessary for resilient, decentralised outpatient infrastructure to reduce reliance on hospitals.
“During pandemic surges, many routine consultations, diagnostics and elective procedures were postponed, creating a substantial backlog of care that continues to drive elevated demand for clinic and diagnostic space to accommodate people waiting for appointments, tests and procedures.”
As such, technological advancements are reinforcing this transition, it adds.
Minimally invasive surgery, improved imaging, enhanced diagnostics and more efficient treatment protocols mean that procedures which once required hospitalisation can now be performed at outpatient facilities. This shift is expanding the range of operators seeking modern, purpose-built outpatient space, declares the report.
Policy reform is another critical driver. In markets such as Germany and the Netherlands, legislation explicitly encourages the relocation of appropriate treatments to outpatient settings, it adds.
In Germany, the Ambulantisierung (outpatient treatment) initiative and sweeping Krankenhausreform (hospital reform), which came into force in January 2025, are reshaping the healthcare landscape.
The report elaborates that the reform consolidates complex care in specialist centres, reduces the number of general hospitals and incentivises hospitals to shift reimbursable treatments to outpatient environments. The reform could lead to the closure of about 20% of Germany’s hospitals, significantly increasing the necessary for modern outpatient facilities, it adds.
Economic conditions have played a role in the reform. The report highlights that healthcare expfinishiture has grown quicker than inflation across much of Europe, with Germany and the Netherlands recording some of the quickest increases between 2019 and 2022. Outpatient expfinishiture, in particular, is rising more quickly than hospital spfinishing, underscoring how demand and funding are aligning to support the growth of MOBs, it notes.
Popular locations
Although the MOB model is spreading across Europe, the report identifies Germany and the Netherlands as the two markets where the model has been adopted.
It explains that Germany represents the region’s most mature MOB ecosystem. The counattempt’s healthcare structure, which is built on a mix of public, non-profit and private service providers, supports a large base of self-employed physicians who prefer leasing over property ownership.
The report states that Germany’s outpatient sector has consolidated significantly over the past two decades, driven by the growth of Medizinische Versorgungszentren (MVZs), or multi-speciality outpatient centres, created in 2004 to modernise care delivery.
According to the data, the number of MVZs rose from 2,240 in 2011 to 4,897 in 2023. Many of these multi-speciality outpatient centres require larger premises than traditional solo practices, fuelling demand for purpose-built or refurbished MOBs. The report estimates that Germany has about 8,000 buildings functioning as such facilities, although most remain tiny and fragmented, presenting opportunities for portfolio aggregation and institutional acquisition.
In addition, Germany’s strong insurance-based healthcare model supports the sector. The report points out that, with hospitals expected to increasingly focus on complex treatments due to ongoing reform, community-based outpatient centres are positioned for expansion.
Larger German cities and metropolitan regions such as Munich, Berlin, Hamburg, Frankfurt and Düsseldorf, are expected to see continued outpatient growth, while suburban and secondary nodes may benefit from the shift towards decentralised care.
On the other hand, the Netherlands, while tinyer in scale, is Europe’s quickest growing MOB market, declares the report. It explains that its healthcare system, funded by mandatory insurance and supported by strong insurer incentives, is actively relocating services out of hospitals. The Integraal Zorgakkoord (IZA) of 2022 has accelerated this effort by encouraging outpatient treatment through indepfinishent facilities known as Zelfstandige Behandelcentra.
The data displays that the number of these outpatient clinics has nearly tripled over the past decade, rising from about 250 in 2011 to 743 in 2023. “Dutch insurers have taken a proactive role in directing patients to outpatient providers for cost efficiency and convenience, driving consistent demand for modern, well-located medical office space,” declares the report.
The Netherlands has one of Europe’s quickest growing healthcare expfinishiture profiles, it declares. Total spfinishing reached about €113 billion in 2024, a 59% rise since 2015, outpacing both Germany and the broader European Union average. Outpatient expfinishiture is expanding more rapidly than inpatient costs, reinforcing the demand for community-based medical infrastructure, it adds.
France and the UK, however, are less suited to the MOB model due to their healthcare structures, declares the report.
France’s outpatient sector is dominated by private clinics that typically own or operate their own facilities, while public health centres play a major role. The limited presence of indepfinishent practitioners reduces the viability of multi-tenant MOBs.
The UK’s centralised National Health Service (NHS) similarly concentrates care within hospitals and NHS-linked units, which leaves limited room for indepfinishently operated outpatient buildings, declares the report.
Investment potential
The report declares that despite the varying levels of adoption across Europe, the investment potential of MOBs is increasingly evident. It highlights that investor demand has grown significantly over the past decade, even as the supply of investment-grade assets remains limited.
Pension funds, real estate investment trusts (REITs), private equity firms and dedicated healthcare infrastructure funds have begun acquiring MOBs, drawn to their defensive income streams, long lease terms and stable tenant bases. For instance, HIH Invest, Cofinimmo, Swiss Life Asset Managers and TSC Real Estate Group have created notable acquisitions in Germany and the Netherlands in recent years.
The report declares Savills conducted technical due diligence and valuations on seven MOB transactions in 2025.
Total MOB investments in Germany and the Netherlands reached almost €1 billion in 2021 before moderating during the interest rate hikes of 2023 and 2024. However, the slowdown in dealcreating stemmed from capital market conditions rather than weakening sector fundamentals, the report stresses. Occupational demand remained strong and development pipelines continued to expand steadily.
One of the largegest challenges investors are facing is the limited availability of large-scale, institutional-quality MOB portfolios, declares the report. It points out that most assets in Europe are tiny, single-property holdings, often managed by family owners or tiny private landlords, which creates it difficult for REITs and institutional investors to deploy capital at scale.
Yet, the sector has created opportunities for value creation, the report highlights. Savills’ data displays that European MOB yields currently average about 6.5%, slightly lower than the US average of 7%.
The report declares, “As the sector matures and more portfolios come to market, yields may compress further, especially if interest rates stabilise or decline. Investor appetite is expected to strengthen as transactional evidence accumulates and confidence builds around lease structures and tenant performance.”
The US market offers a preview of Europe’s future, it adds. MOB investments in the US exceeded US$9 billion in 2024 alone, with several major portfolio transactions. US-based investors seeking diversification and long-term, healthcare-backed income streams are expected to display interest in Europe’s MOB sector as it continues to expand.
MOBs, once a niche segment, are now emerging as one of Europe’s most promising new asset classes, declares the report.
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