Poland has greatest potential for healthcare real estate in Europe
Focus should be on medical care, says president of Chamber of Long-Term Care Facilities.
Healthcare facilities are one of the fastest-growing asset classes in western Europe, but the same demographic pressure is making Poland one of the most rapidly ageing societies in the EU. Recent research from Savills indicated that Poland has the greatest potential for healthcare real estate, but the current rate of development of care infrastructure does not yet reflect that.
Andrzej Lejczak, president of the Polish Chamber of Long-Term Care Facilities, says that the situation, post Covid, is not too bad and the private sector is growing rapidly. In an interview with Sylwia Ziemacka of the Senior Housing and Healthcare Association (SHHA), he said there are now about 900 private sector facilities in Poland.
Last year, 50 new facilities opened, followed by 13 new homes in the first three months of 2023, providing a further 500 beds. A further 15 were scheduled for the second quarter, providing an additional 600 beds.
“The trends seem good and I am happy to report that the Polish nursing-home sector continues to develop,” Lejczak says. There is also an increasing number of cross-border investors in the sector in Poland, notably from France and Germany.
Focus on core requirements
However, he stresses that it is important to focus on the core requirements. “We don’t want to have only premium commercial nursing homes. We need to focus on good medical-service ones.”
He points out that an estimated one million people in Poland suffer from Alzheimer’s disease and, by 2050, there will be five million people over 75 years of age. “It means we need new professional beds in professional nursing homes.”
There are “lifestyle” senior-living models emerging that emphasise independent living or assisted living, but he says that is not where the emphasis is required.
The European Commission has said that policy should shift towards community-based care, but Lejczak says not all EU ideas are appropriate for the Polish sector.
“There is a lack of beds now in Poland,” he says. “We need to build the institutions up, because that job has not been done for the past 30 years.”
Home-based care should be “the second leg of the system”, he adds.
Residents from abroad
Private-sector healthcare is attracting residents from other countries, notably Germany.
“It’s not yet a big phenomenon in comparison with domestic demand,” says Mariusz Sapieha, a researcher based at the University of Amsterdam. The potential is there, though, and he says one of the main drivers for Germans to relocate is the relative cost of care, which is three times higher in Germany.
However, some relocate because of the quality of care in Poland, according to research Sapieha has undertaken over the past five years among 400 German-speaking seniors in Polish institutions.
The homes catering to German residents are mainly located in the west of Poland, including Pomerania and Lower Silesia. While some homes focus on German residents exclusively, in others Germans comprise about 10% of residents and, despite the language skills required and the bureaucratic burden, it is a convenient way of filling empty beds.
Sapieha envisages numbers rising further as the infrastructure develops. “We have newly built, shiny, luxurious institutions that are able to provide the highest-quality care, which wasn’t the case 10 years ago.”
Shortage of workers
One universal challenge, however, is the shortage of workers in the care sector.
Lejczak refers to this as “the care gap”, which has been exacerbated by Polish workers leaving the country to work abroad. This has been offset to some extent by the influx of people escaping the war in Ukraine. Agencies are also hiring from the Philippines and the Indian sub-continent.
“There’s a small positive in this story, because the Polish government’s ministry of health is offering a better salary for medical care givers.” This is part of an initiative to attract more people to the sector.
Lejczak says the Polish care sector is an attractive market for investors, but he emphasised the need for high-dependency beds, because 70% of residents are wheelchair users, more than 50% have dementia and 70% have urinary problems. “We will need really good medical nursing homes; this is [what] we need first.”