Co-living for seniors: a new solution to a growing problem
Korian sees its role in the senior sector as providing alternatives to nursing homes, such as assisted living and co-living facilities. By Frédéric Durousseau.
There are several important trends set to affect the healthcare real estate sector in the coming years. One of the key ones is the ageing of the population in Europe: the expectation is that the number of people over 65 will increase by 20% between 2020 and 2030. In addition, the population aged over 80 will double from 5% to 10% of the total population by 2050.
The number of people suffering from one or more chronic diseases related to ageing and lifestyle is therefore increasing sharply, and so is the demand for long-term care services and the need for qualified staff. While cognitive ability and autonomy of more patients are challenged, so is their ability to express opinions or to complain, so the interaction between patients and caregivers becomes more difficult.
Another trend is increasing regulation of the healthcare sector. Reforms are being pushed through in most European countries to improve transparency and control. Demands on the health authorities and people’s desire to remain at home means that medical buildings are being transformed to cater more and more to outpatient care.
Co-living for seniors
At Korian we see our future role as ensuring that everyone, within the radius of a few kilometres, can benefit from a home-help service, which will allow them to stay at home for as long as possible, and benefit from day hospital services, supported by online outpatient services.
Our role is also to ensure that, if and when they leave home, people can find alternative solutions. So they do not immediately go into a nursing home, but can choose assisted living or a co-living facility that may better meet their needs.
All these services are based on the presence nearby of clinics that specialise in the treatment of chronic illnesses and dependency, in mental health as well as in follow-up care or more specialised services. Clinics with such medical expertise can support retirement homes.
Korian’s aim is to stick to these societal developments. For example, we are launching a co-living concept for senior citizens. Called Âges & Vies, this involves the creation of small modules of two eight-bed houses next to each other and organised around a common living room, dining room and kitchen. We are aiming to set this up in towns with more than 1,000 inhabitants in France and plan to build 100 homes by the end of 2022, and get to 300 by 2024, which will be able to accommodate 3,000 people.
Of course, this alternative development is supported by the strengthening of our health expertise, which we are enhancing through the acquisition of clinics and the development of outpatient centres. Or in mental health, where we have become the number 2 company in France with the acquisition of Inicea, and which is a growing sector internationally and in Italy and Spain in particular.
There are two other major transformations that are happening : environmental and digital.
The Environmental challenge
As the war in Ukraine has led to much higher energy prices, the long-term environmental challenge has become a short-term energy challenge. Since 2018, Korian has committed to assessing an annual carbon footprint of its operations and has defined a low-carbon roadmap for its buildings that will see the group cut its CO2 emissions by 40% by 2030 compared to 2018 levels. This roadmap has already paved the way towards alternative and renewable energy sources.
The challenges are great because, by their nature, medical buildings consume more energy and water than normal buildings: they are in use 24 hours a day, seven days a week, they need to provide comfort and warmth to protect patients, and they need more space for medical equipment.
For our new buildings in France we have been working since 2017 on the HEQ label and have adopted the E+C on our projects since 2020. In Europe, all our new buildings must meet high environmental quality standards, such as HEQ in France and equivalent certifications abroad, such as LEED or BREEAM. These buildings, as well as our existing assets, will be equipped, for example, with heat pumps and solar panels, or other renewable sources of energy with a lower carbon footprint and higher performance.
The second transformation concerns digital technology. Like any other business, real estate is going digital and at Korian we have embraced it with Building Information Modelling (BIM).
Using BIM we can produce 3D digital models of our buildings from the planning phase. This allows us to control the cost of our investment better during the construction phase, and in the long term it allows us to control and optimise the cost of operations as we have plans of the network and know all the components of the building.
BIM also allows us to understand our investments over the entire lifecycle of the building, while maintaining up-to-date document management. It is enabling us to better assess, control and plan the carbon footprint of our buildings.
The use of BIM also facilitates modular construction, allowing us to use digitally designed modules that are prefabricated in factories. The builders then assemble these like a jigsaw puzzle on site. Korian is preparing to implement an industrial construction offsite approach to build 3D buildings.
This industrial logic is also reflected in the desire to deploy our strategy on a European scale. We are deploying the same type of Âges & Vies concept in Germany by adapting the final product to the local clientele, in this case building ‘double houses’, each of which can accommodate 12 people.
Five ESG goals
Korian has defined five main goals in its journey towards ESG. The first is to provide excellent care, the second is to be an employer of choice, and the third is to facilitate the development of a more inclusive society. The fourth is to be committed as a responsible local player, and the fifth is to reduce our environmental footprint.
We follow a dashboard in our monthly business reviews and the evolution of each key performance indicator (KPI) that we have on that dashboard. For example, what does it mean to be an employee of choice? We have defined three KPIs, the first of which is the average tenure of our staff, which is seven years, and we are aiming to increase that. It’s not about recruiting but about retaining people.
We also track the percentage of staff in our qualified training programme, which must be at least 10%. It means a lot to us if a nurse can become a nursing home director, or a regional director become a chief operations officer. We want people to grow and develop. The third KPI we have is regarding the percentage of women in top management. We have reached our 50% goal and are aiming to go higher.
Frédéric Durousseau is group chief real estate & development officer at Korian
Korian: key facts
Korian is the leading European care services group for elderly and vulnerable people. In 2021, revenue was €4.3 billion and the group had 60,000 employees.
Its portfolio includes:
- Long-term care (mainly nursing homes, which represent 64% of revenues).
- Healthcare (mainly clinics, health facilities and outpatient activities, representing 25% of revenues).
- Community Care (mainly co-living facilities, home care services and assisted living, representing 11% of revenues).
Korian’s strategy is based on two pillars:
- The strengthening of medical activities, developing specialised clinics, day hospitals and mental health facilities.
- The development of alternative care solutions, with the reinforcement of home help and the development of senior shared accommodation concepts in smaller units.
Korian is also a significant real estate player, operating more than 1,000 buildings in seven countries, 250 of which it fully owns. The portfolio is worth €3.2 billion and comprises a wide range of assets, from nursing homes to psychiatric clinics to senior housing.