It’s time for an open dialogue on senior housing and healthcare

We need to find a new equilibrium in the senior housing and healthcare market with long-term scope, says Sylwia Ziemacka.

One thing we can be sure of, in these times of uncertainty, is that we are not going to reverse demographic trends. We are at a turning point, both from a societal and economic perspective. We observe the growing need for independent living arrangements for seniors (from senior living/housing, assisted living and integrated retirement communities) as well as for more specific facilities like nursing homes for people with dementia and hospices.

Due to the ageing population, these markets are booming and are fairly important for our society in terms of liveability, wellbeing and healthcare spending. Creating alignment in the value chain is the only way forward to tackle the biggest residential and healthcare challenges of the coming decades.

The Senior Housing & Healthcare Association (SHHA) and the European Public Real Estate Association (EPRA) are organising the first Senior Housing & Healthcare Summit on 27 June in Brussels. Its aim is to drive an open dialogue with all shareholders important for the future of the sector: policymakers and regulators, investors, operators, infrastructure providers, financial institutions and social-side representatives. 

EU Care Strategy

In September 2022, the European Commission launched the European Care Strategy to ensure quality, affordable and accessible care services across the European Union and improve the situation for both care receivers and the people caring for them, professionally or informally.

The commission recommended that member states draw up national action plans to make care in the EU more available, accessible and of better quality for all. It suggested increasing the offer and mix of professional long-term care services (home care, community-based care and residential care), closing territorial gaps in the access to long-term care, rolling out accessible digital solutions in the provision of care services, and ensuring that long-term care services and facilities are accessible to people with disabilities.

The strategy is also about ensuring high-quality criteria and standards for long-term care providers, and mobilising adequate and sustainable funding for long-term care, including by using EU funds.

Investment is important to attract and retain talent to the care sector, which is often characterised by difficult working conditions and low wages, as well as to fulfil the sector’s economic and job-creation potential.

Investing in high-quality care also means improving women’s participation in the labour market and gender equality, in particular gender pay and pension gaps. Women still bear the brunt of care responsibilities, with 90% of the formal care workforce made up of women, and 7.7 million women out of employment because of care responsibilities.

Asset class and investment perspective

As ageing societies have become a mainstream topic, the senior housing and healthcare sector is climbing the investors’ ladder. We need more benchmarking, underwriting and in-depth research on risk management and ESG performance.

Measurement on environmental performance (e.g. energy consumption and CO2) is becoming part of daily practice, but how do we measure social impact and do valuation? How is the European investment market evolving over time, in terms of deal flow, diversification, rental levels and yields. Which countries have strong fundamentals and which are emerging? When do we call an asset class resilient?

Focus on operational excellence

Operational real estate is all about people, from volunteers, welfare workers to skilled nurses. The scarcity of personnel is a threat, especially in long-term care. How do we create an attractive labour market? How can we manage risks in nursing homes? Which new living concepts do we need to increase quality of life, guarantee affordability and reduce healthcare spending as a proportion of GDP.

Collaboration and long-term vision

From an SHHA perspective, the call to action is aimed at reinforcing collaboration, trust and focus on the long term. “A close and successful cooperation between operators with their residents, investors and stakeholders such as local governments, is the mission of the SHHA. Creating alignment in the value chain is the only way forward to tackle the biggest residential and healthcare challenges of the coming decades,” said Ron van Bloois, chair of the SHHA.

EPRA emphasises that with ageing populations becoming a megatrend in European societies, the need for social care and senior living is becoming ever more important, as is providing long-term retirement income as people live longer. “Because real estate is a very capital-intensive business, the private sector – through listed property companies – will always be needed to play an essential role in delivering long-term capital investment in real estate and providing quality assets for social care,” said Dominique Moerenhout, chief executive of EPRA.

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