Senior living climbs up the investment market

Tim Harrup

Real estate analyst Colliers International has surveyed the senior living market in terms of investment, and has recently published a report. This looks at eight of the largest markets and highlights the growing interest in the segment. The relative merits, shortcomings and opportunities in the EMEA healthcare investment market, Colliers points out, have been under the microscope more than ever in the COVID-19 era.

To start with, one of the graphs produced by Colliers in its ‘EMEA Healthcare Report’ shows that in each of 2019 and 2020, European investment volumes in senior living were between seven and eight billion Euros. In 2011 and 2012, the figure was under one billion. There is also greater investor interest in senior living assets than in traditional primary or secondary healthcare – 21%, compared to 8% and 2% respectively. Although senior living investment has primarily been dominated by the provision of housing since the start of 2010, the nursing/care homes component of senior living accounted for almost two thirds of healthcare investment activity in 2020.

Moving on to the latest data, Colliers says that although the uptick in the nursing/care home component of transactions picked up pace recently, representing a reversal of the historic trend, it believes the market will revert back towards greater growth in the development and trading of senior housing. 2020 has placed nursing and care homes under extreme operational pressure, highlighting a need for greater investment. Yet while care/ nursing home demands are likely to grow as populations age, these populations are living healthier and longer lives, and those aged 65+ want to be independent for longer, and with more choice.

The eight major European countries surveyed in detail in this report are projected to see the 65+ population expand by a collective 21.7 million, from 2020 to 2035. On average, this will see the 65+ population account for 25% of the national population. This is creating a very significant market force to be catered for, particularly as they are accompanied by high levels of wealth. This is driving demand for greater choice, driving the provision of various forms of senior living types and options across all geographies – including assisted living, extra care facilities and retirement care villages/communities.

With growing demand for a variety of healthcare and senior living services and assets, investment volumes, Colliers is certain, will expand across Europe. Although national healthcare funding structures and regimes can certainly complicate the ability of the market to function transparently, there is a clear lack of supply of quality assets, and their limited volume points to further development as a clear route to market.