Potential investors are spoilt for choice as there are dozens of locations where demand is high and supply is low in the sector, experts agreed at Real Asset Media’s ‘Where’s the French Senior Living Market headed?’ investment briefing, which was held online this week.
‘The cities where demand is biggest are the ones with the lowest provision rate,’ said Samuel Vetrak, CEO, Bonard. ‘The list includes Paris, Lyon, Marseille and Nice’.
The provision rate in the top 20 cities in France ranges from 1.7% to 9.7%, with Toulon and Nice providing the biggest opportunities for development of service residences.
Paris is also an interesting market, because it has a provision rate of 4.2% and the largest number of people aged over 75 in France. Angers, Lyon and Toulouse are attracting the most interest by providers as new locations for assisted living establishments.
There is a strong pipeline of 248 developments with a total of nearly 15,000 beds to be open by 2025, but it is not enough to keep up with demand.
‘The average size of buildings in the pipeline is 59 beds, which is relatively small,’ said Frédéric Dib, President, Mozaic Asset Management. ‘For example Lyon is well positioned with over 2,300 additional beds coming, but the provision rate will stay at 5% because of the growth of demand’.
Senior living will need to be focused on both city and suburban locations because the demand is everywhere. According to a snap poll conducted by Real Asset Media, 36% of respondents said that it should be equally focused, with the rest evenly split – 32% opting for city centre and 32% for suburban locations.
France has nearly 8,000 establishments for dependent people with a capacity of 640,000 beds and nearly 3,000 assisted living establishments, among which there are only just over 600 private service residences.
‘But most of the existing stock is old, with very low levels of service, catering for the social care end of the spectrum,’ said Dib. ‘What’s needed is a very different product’.
Unlike nursing homes, where the average stay is 18 months, senior residences cater for healthy people who tend to stay for many years. Older people are increasingly focused on quality of life and they want quality buildings with a wide range of services and amenities.
The market is currently dominated by French investors, who account for 70% of investment transactions in the sector. There are ten main providers in the private service residences category, which together manage over 65% of the total.
Want to catch up with the whole panel discussion on French Senior Living? Watch, listen or download the webinar below: