Growing shortage of supported housing despite investments
16 July 2018
The volume of investment in healthcare real estate has been increasing in recent years. Around 300 million euros was invested in this segment in the first half of 2018, representing about 9% of the total volume of housing investment. This becomes apparent from analyses of real estate advisor Capital Value. Investments focused on various types of extramural dwellings and on healthcare real estate accommodating primary care facilities. Even so, these investments do little to reduce the shortage of supported housing.
Housing associations have an important role to play in the healthcare real estate market
Alongside the domestic and international institutional investors, who are further consolidating their presence in the healthcare real estate market, it is noticeable that this year housing associations are also claiming a substantial share of the healthcare real estate investment volume (about 36 million euros). The Housing Act is stimulating housing associations to respond to local housing and healthcare demands by means of performance agreements and in collaboration with local councils and tenants.
As became apparent from Capital Value research earlier this year, 95% of housing associations possessing healthcare real estate indicate that they wish to play a significant role in accommodating senior citizens in the regulated rental sector in the coming 10 years. In this way, housing associations are preparing for a target group that is ageing and living at home for longer. In addition, a significant development is that an ever increasing number of housing associations are selling non-SGEI healthcare real estate or healthcare real estate away from the core region to other housing associations and to investors, thus releasing funds for investments in the core business. This sale mainly concerns health centres, high-end residential units for the elderly and intramural healthcare complexes.
Shortage of supported dwellings not yet resolved
Despite the increasing volume of investment in healthcare real estate, the shortage of supported dwellings is still inadequately resolved. Resulting from the growing number of people aged 75 or older and the government policy aimed at keeping people living at home for as long as possible, more dwellings are needed and some of these must be suitable for seniors with mobility restrictions. The supply of housing is currently insufficient to meet this.
According to the ABF Research Fortuna Study (May 2018), until 2030, around 300,000 extra dwellings will be needed for seniors and households facing mobility restrictions. As early as 2016 seniors' organisation ANBO calculated that about 43% of the 114 local councils they had investigated were facing a shortage of such dwellings. More than 50% of the currently available healthcare real estate was built before 1980 (EIB). Replacement investment is necessary to enable the outdated healthcare real estate stock to meet modern demands.
According to Kees van Harten, Managing Director of Capital Value, "We are seeing healthcare institutions increasingly seeking collaboration with investors and developers to prepare old locations for the future. The old care homes that are standing empty often occupy prime locations. An increasing number of builders and developers are focusing specifically on the development or redevelopment of healthcare real estate and can optimally satisfy such needs. The shortages in this segment can be addressed by collaboration between investors, healthcare institutions and housing associations."
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