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Senior homes - the figures behind the trend

The emergence of rest homes and other forms of residential accommodation for the elderly as an investment class, has prompted CBRE to investigate and explain exactly what is happening in this domain in Belgium, and why.

Senior housing, says the real estate advisor, has attracted growing interest from investors over recent years for the bricks and mortar component. Operators prefer to focus on their operational activities to allow for quick expansion, without having to carry the property costs. The outsourcing of the property component happens in the form of long-term lease rights where the operator and investor agree terms on, for example, a 27-year lease with indexed rent. Institutional investors such as Cofinimmo, Care Property Invest, and Ethias are well-established in the Belgian market, and Aedifica has recently disposed of holdings in other asset classes to become a pure European healthcare real estate player. Beyond the general, attractive investment conditions of today, these investors are convinced of the long-term growth potential from the aging of the population that supports continued demand for elderly homes.

CBRE goes on to explain that the population is ageing and is doing so rapidly. In January 2019, Belgium numbered a little over 1.5 million people aged 70 years or older. That is 13.6% of the total population. By 2050, this group will grow to more than 2.4 million people and thus to 19.5% of the population. The number of those aged 80 years and older will almost double over the same period. Described simply, nearly all of the population growth in Belgium over the next 30 years will come from those aged 60 years or older. This will shift the old age dependency ratio from 0.30 today to 0.42 in 2050 and is a monumental demographic transformation, similar to many developed countries. CBRE points out that there will be far reaching implications for social organisation, government budgets, etc., including elderly care institutions.
Tim Harrup
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