Knight Frank presented their Senior Living Annual Review 2020 virtually last week. As always, the report and panel discussion were both interesting and informative, and a must for anyone working in the sector. Knight Frank forecast that this will be a record year for institutional investment in the UK senior living market, anticipating £1.5 billion being spent by the end of 2020.
Tom Scaife and Lauren Harwood from Knight Frank opened proceedings by detailing how, since the pandemic, senior housing has never been more important with the emphasis on safety, wellbeing, combating loneliness and infection control. Supply is not meeting the growing demand, creating huge opportunity in the sector. Data sourced from UK operators shows the key trends – increased levels of investment, larger schemes, more urban locations, a variety of tenure options and design evolution.
The panel discussion was chaired by Michael Voges, executive director of ARCO, with Jamie Bunce of Inspired Villages, Jason Leek of Riverstone, Kevin Beirne from Octopus Real Estate, Nick Sanderson of Audley Group and Peter Youngs from Knight Frank.
Around 85% of ARCO members reported enquiries and sales were significantly up on this time last year. A key factor for this, highlighted by Jamie Bunce, is that the pandemic has raised issues of loneliness and anxiety in older people living alone, therefore reinforcing the positives of community living to potential residents and their families.
From the investors point of view Kevin Beirne said that retirement communities are seen as safe havens for both customers and investors, and that it’s not just about financial return for operators but also the good they can do for the communities and people’s quality of life.
The importance of scale was discussed by Jason Leek. A larger development allows for more wellbeing facilities to be integrated such as physiotherapy and GP services. Riverstone have appointed a wellbeing director to drive these areas, showing the growing importance of adopting a wellbeing and holistic approach to the development of retirement communities.
Peter Youngs of Knight Frank discussed the growth of housing-with-care within the senior living sector, the variety of tenures available, and the importance of understanding the customer and proposition.
On the subject of the types of tenure, from sales to rental, Nick Sanderson pointed out that we live in a country where there is a rather unique obsession with home ownership. He said that this is understandable as it has served the client group very well – they are likely to have made more from their house than they did from working, making this a social issue as well as an economic issue.
There was also discussion on the importance of updating regulation, legislation and planning to help bring more housing-with-care forward. New Zealand was cited as an example, where sector-specific legislation has clearly helped drive investment and brought benefits to hundreds of thousands more older people.
It was heartening to hear from the operators how retirement communities are coming out of the pandemic stronger. And extremely positive that the speakers, who are all leaders in the sector, are keen to continue working together through ARCO to set standards and to find new tenure models, enabling more people to enjoy the lifestyle that retirement living offers.
The Knight Frank Senior Living Annual Review 2020 is available to read here.