The nursing/care home component of European investment volumes superseded the trading of senior living assets for the first time in five years during 2020 and into Q1 2021, yet growth in demand for greater senior housing options will drive higher investment market share for these assets longer term.
The eight major European countries surveyed in this report are projected to see their 65+ population account for 25 percent of the national population, expanding by a collective 21.7 million from 2020 to 2035. This is larger than the current combined population of London or that of Paris and Ile de France, creating a significant market force to be catered for, driving demand for various forms of senior living assets.
“As baby boomers age into the senior living resident age cohort, they will expect and desire state-of-the-art facilities that focus on technology and the rapidly evolving delivery of health care. Senior living facilities that have designated space for on-site telehealth visits with trained staff are more likely to attract potential residents than obsolete facilities that do not. We are seeing an increasing weight of capital from North America, Asia, and Europe targeting this sector, although investors are wary of some risks associated such as obsolescence, financially weak operators, and a demand wave that remains 5-7 years away,” Richard Divall, Head of Cross Border Capital Markets, EMEA, said.
Colliers recent Global Investor Survey denoted that 21 percent of respondents earmarked an interest in investing in senior living assets in 2021. So far in 2021 investment volumes into the sector have expanded from a five-year average of 2.3 percent to 3.8 percent. Although volumes of around €7 billion per year are small in comparison to other sectors, the opaque and nascent nature of healthcare as a real estate investment class means the reporting of transaction volumes is undoubtedly lower than what is happening on the ground.