Huge demand for retirement residences and shortage of land to build on are leading to repurposing of existing assets, experts agreed at Real Asset Media’s ‘Where’s the French Senior Living Market headed?’ investment briefing, which was held online recently.
‘Cities like Paris, with large populations and low provision rates, are the most attractive for investors, but from a real estate perspective these are also the places where land prices are the highest and where there is also a real scarcity of available land,’ said Frédéric Dib, President, Mozaic Asset Management.
The average residence built by market leader Domitys, for example, is 6 to 8,000 m2, a significant size, so the company has been looking for alternative solutions to development.
‘All the big investors now focus on senior housing in the big cities,’ said Arnaud Fety, Head of Institutional Investors Department, Aegide-Domitys. ‘So in order to cater for demand we are now negotiating to convert office buildings into senior living facilities. We are doing a huge refurbishment of an asset in Paris and there will be more’.
Another advantage of repurposing instead of developing is avoiding red tape.
‘Planning regulations in France are very strict and the process is quite slow,’ said Dib. ‘It tends to be faster in other European countries. In Ireland it is possible to go from beginning to end, from application to a completed building, in 18 months but in France the process will take at least three years and often more’.
Rules may be different, but the market is quite similar across the Continent.
‘Residents’ needs are the same in France, Germany, Italy or Portugal, old people don’t want to be alone and want a good quality of life,’ said Fety. ‘We only do minor changes to cater for the local market, for example in Belgium breakfast is included in the rent. But our business model is the same and our aim is to take care of our customers the way we’d like our grandparents to be treated’.
French companies are leading the way into Europe. Mozaic, which has a presence in France, Germany, Italy and Spain is expanding into Portugal, the Netherlands and Ireland this year, while Domitys is establishing a presence in Italy and Belgium.
If you missed the Real Asset Media’s ‘Where’s the French Senior Living Market headed? it is available to watch or listen to as a podcast: