Nordic age care system creates resilient investment sector

Although current challenges such as rising inflation and interest rate hikes have taken a toll on investment volumes in most sectors of the real estate market one area that continues to be of interest is the aged care market in the Nordics.

Northern Horizon investment director Kasper Wehner explained that because local municipalities pay for senior care it gives the sector resilience.

“We think it is still very interesting and we’re very active in seeking new opportunities and in Sweden, Finland and Denmark,” Wehner said.

“Nordics governments have committed to provide the healthcare to elderly people so therefore so these care services are 100% funded by the municipalities. You don’t need to pay anything yourself and it doesn’t matter if you’re rich or poor there is a universal care package for everyone,” he explained.

Operators benefit because economic downturns do not affect their income as the clients can still pay. While residents have to pay the rent the care package, which is the expensive component of being at a care home, is taken care of by the municipalities.

There is a free choice model, particularly in Denmark,  so elderly people can choose their home, but the money from the municipality follows them.

“That really makes the model resilient because these municipalities are still able to pay and can’t go into bankruptcy, so there will be enough money in the system to fund this for some years to come,” Wehner said.

Please click on the video above to watch the full interview or listen to the podcast below.