Spain in particular, and Western countries in general, are experiencing an ageing of their populations. In the face of problems that are not relevant here, there is a B side to this ageing: we are living longer and longer, due to advances in medicine in general and concern for a healthier lifestyle, among other reasons.
In short, we are living longer and we want to live better. Thus, the niche real estate market for this sector of the population has become more interesting for investors and has seen an increase in developments.
In fact, the World Health Organisation (WHO) recommends that there should be 5 nursing home beds per 100,000 inhabitants. As reports and experts warn, we are far from reaching these quotas. For this reason, senior living has become a bet with a great future for the construction sector.
Current situation of senior living in Spain
We have already spoken here about the concept of senior living and the increase in the number of senior residences in our country. According to data from the National Institute of Statistics (collected in Idealista), in 2050, 31.4% of the population will be aged 65 or over, compared to the current 19.6%. In fact, by the middle of the century, the largest population group will be those aged 70 to 79.
The increase in this senior population is the main ingredient for the construction and real estate sectors to be moving to meet this challenge full of possibilities.
Another key factor offered by this online real estate portal is the following: firstly, only 3 to 4% of this segment of the population live in retirement homes, because the majority of people aged 65 and over prefer to live at home. This would be another determining factor for senior living, becausethese are not retirement homes per se, but homes adapted to offer the highest quality of life and added services to independent people over the age of 65.
New players in the market and new features of the context
The business daily El Economista reports that major investors in the sector have launched projects worth more than 2.1 billion euros between 2021 and 2022. However, the expectation that this figure will grow is very high: there is only a ratio of 3.1 beds for every 100 people over 65 years of age, when the figure estimated by the WHO is 5 per 100. Therefore, the expected investment to achieve these goals is 13 billion euros until 2030.
Another factor behind the attractiveness of the senior market for investors in Spain, mainly on the Mediterranean coast and the Balearic Islands, is mobility: in 2019, 29 % of seniors changed residence (a total of 258,996), with a significant increase since 2015 (with 200,983). Moreover, the average age of these migrant seniors is 71.6 years old and 81 % of them are Spanish, with the remaining 19 % being foreigners (another focus of interest for the senior living market).
El Español points out that traditional investors are still interested in elderly care homes, but that there are movements that reinforce the international investment of large funds: Azora has acquired four operational care homes in Madrid, with an investment of 13 million euros; Confinimmo, a Belgian real estate company specialising in healthcare, has acquired the portfolio of Batipart, i.e. 18 care homes; other international players such as Swisslife and IcadeSanté have also incorporated assets.
Trends and the future of senior living
Today, there are mainly four concepts within senior living that differentiate them from each other:
- Senior cohousing: a residential project generated by a cooperative of people with common interests.
- Senior coliving: housing with communal areas developed by developers and aimed at the elderly.
- Senior resort: conceptualised with hotel characteristics, generally on the coast and with a foreign target public.
- Serviced flats: housing with services aimed at the over 65s, such as basic medical services.
Last April, Avintia launched AI Quality Care, a new company whose purpose is the planning, construction, management and operation of buildings for retirement homes, day centres, care centres and housing with care services for the elderly.
The objectives of AI Quality Care are perfectly in line with one of Avintia’s main areas of business and innovation, which is industrialised construction. Through the application of this discipline, housing in the senior living niche can be undertaken in shorter timescales, as well as guaranteeing the highest standards and promoting innovation, management optimisation and sustainability.Paz Membibre, business director of the new senior living division, said: “This launch is the Grupo Avintia’s commitment to the wellbeing and personal care society, creating and adding value in everything related to properties aimed at caring for people, health care and new residential models to respond to the increase in life expectancy, both for dependent and non-dependent elderly people, as well as for other socio-health services”.