‘The European market is becoming more liquid and more competitive’

The market is growing fast in many European countries, but it is still difficult to create a Pan-European platform or portfolio, delegates heard at Real Asset Media’s Senior Housing & Healthcare Investment Briefing that was held at Savills’ headquarters in London recently.

Few investors go cross-border, because rules and regulations differ markedly from one country to another and also because it is difficult to find a local operating partner and having the right team on the ground that understands the nuances of that market.

Healthcare and senior housing offer investors long-term secure income flows, but they are management-intensive and subject to operator risk. ‘It is not about bricks and mortar, it is about people taking care of people so you have to get that right,’ said Stefaan Gielens, CEO, Aedifica. 

‘Legislation is different in all EU countries but the challenges are the same,’ he said. ‘There are three main drivers: the first is demographics, which is a no-brainer, the second is the growing maturity of markets as consolidation among operators speeds up, especially in France, Belgium, Germany and the Netherlands, and the third is the authorities’ strategy and regulations’.

The market is becoming more liquid and more competitive and attracting more institutional money.

Domitys, the market leader in France, is leading the way and planning to expand into Spain, Portugal, the Netherlands, Germany, Switzerland and Italy. 

‘France is the first market in Europe to become mature in the care homes and senior housing sector and the very first operators were French,’ said Gielens. The country leads the way with 620 senior housing residences with 47,000 beds and a wide range of options from urban to out of town villages.

In the Netherlands ‘there is a lot of outdated stock and capital is needed to upgrade those facilities so they can meet people’s expectations,’ said Ron van Bloois, Partner, HEVO. ‘Developers must cater for a variety of demands, and affordability of rent will become an increasingly important issue as it guarantees cashflow for the investor’.