SHHA Summit: high investor interest but challenges remain

Europe is a patchwork of different regulations, demand structures and market conditions, experts agreed at the Senior Housing & Healthcare Summit, organised by the SHHA and EPRA, which took place in Brussels this week.

Dagmara Kryskiewicz, Founder VGI, Associate MI

“Investors opt for countries with stable regulations and a clear tax system, so they tend to choose  Germany, the UK or the Netherlands, where the senior living sector is very well organised,” said Dagmara Kryskiewicz, investor, founder VGI, associate, Multiple Impact. “There’s an increased interest in senior housing, but education has an important role to play, because investors need to be aware of all the different products.”

The sector is very strong in Germany, but the country is not immune from current macroeconomic headwinds.

“Inflation, the higher cost of bills and increasing interest rates are making investing harder,” said Nikolai Schmidt, managing director, transaction healthcare, Swiss Life Asset Managers. “There are very few new projects being developed in Germany, especially in nursing homes, and very few investments being made.”

Neighbouring Poland is seen as an interesting market to enter, but there are challenges to be overcome.

Nikolai Schmidt, Managing Director, Transaction Healthcare, Swiss Life Asset Managers

“Investors are cautious about the country and the war in Ukraine next door hasn’t helped,” said Kryskiewicz. “But the main difficulty is that institutional investors want a large portfolio, not a single asset, and that’s a Catch-22 situation in Poland.”

The Nordics, on the other hand, have seen more activity in the market and some large portfolio transactions. “The situation is more positive than in Germany and the sector is still seen as attractive,” said Kasper Wehner, investment director, Northern Horizon. “We’ve even been able to increase rents in line with inflation. But of course the sector is heavily reliant on public funding, so changes in regulations affect us.”

Whatever a market’s specific challenges might be, demand for senior housing and care homes is increasing across Europe.

“There are some real opportunities to make great investments now,” said Wehner. “We need to build new care homes to meet demand. The market is asking and we need to provide an answer.”

All countries also have the common problem of finding, training and retaining specialised staff.

“We all need to find more qualified staff and build more facilities,” said Schmidt. “We are focusing on a mix of patient care and assisted living.”