Europeans often caste envious eyes across the Atlantic where the top five real estate investment trusts have a combined market cap of over $40bn. Europe by contrast remains fragmented, modest and illiquid.

Whilst Jean Claude Marin, the boss of Orpea, tells me that New York investors want to buy a Euroland care home group rather than a French one, institutional investors in property are still cautious and inclined to cherry pick funds on their national basis and national track record.

Recently Cornerstone, like ING before it, has given up on the idea of setting up a Pan-European healthcare property fund. My guess is that within five years the European care home market will be dominated by international operators, principally from France. I think it will take a decade before we see serious Pan-European funds. There is demand for the former, but not for the latter.

Yet there are encouraging signs within the national markets. Dan Bowden, fund manager at AXA Real Estate, says gross yields in Germany for nursing homes are 7.4% and that capital values have returned close to the levels before the recession. Whilst new regulations from the laender will close older homes there is plenty of demand for newer properties.

France is also showing signs of maturity. Bowden points to the recent deal with DVD as proof. “Sale and leaseback deals are one thing, but peer to peer deals where the institutional investor buys a portfolio off another shows another level of maturioty has been reached.” And French hospital groups, such as Medi-Partenaires, are turning to sale and leaseback to fund acquisitions.

The UK is perhaps the least certain. Many large private equity financed outfits face refinancing their property over the next three years. And there is a large funding gap opening up...