A new report from property specialists Knight Frank said that the retirement housing sector is starting to mature as the ageing population drives demand. Demonstration of this was seen last year when a number of takeover deals were completed that included Inspired Villages and Renaissance Villages being acquired by L&G, AXA’s acquisition of Retirement Villages and PegasusLife snapping up Renaissance Retirement.
The demographic trends that are set to drive growth in the sector are now beginning to be more fully understood, by both policy makers and builders, and that there is a cast-iron case for building far more retirement housing at the highest possible standards.
Currently, there are 725,000 specialist retirement units across the UK, split into two main types: housing offering minimal care, and schemes with a range of communal facilities and on-site health carers. Almost one in five over-50s now say they are likely to spend their autumn years in a purpose-built retirement community, according to a survey by Retirement Homesearch and the International Longevity Centre. This suggests that the market still has a great deal to do in order to bridge the gap between supply and demand.
We are, however, now seeing a more focussed approach on delivery including more players in the market, different products and tenure mixes that will all inevitably result in a more diversified offering.
Retirement housing allows investors to access returns from the operational care and leisure business as well as development. As the market matures, investors are taking longer term views on returns, and they are making larger investments in the operational businesses in the sector.
What is absolutely clear is that the retirement housing sector is now firmly out of the blocks, and has the potential to respond to increasingly eager investors and consumers.