Care or nursing homes, as well as assisted living facilities, are an attractive asset class for investors seeking longer-term stability as they:
- can offer potentially higher and more stable returns independent of economic cycles and volatile markets
- provide income security due to lease durations of 20 to 30 years
- offer inflation adjustment through lease indexation
- represent a socially responsible investment
- are part of a growing sector, as future demographic trends indicate
With the European Commission predicting that the number of 80+ year old citizens is set to more than double in the next 20 years, and with average life expectancy beyond retirement age also increasing rapidly, TA Europe has witnessed the obvious requirements for care homes and this particular asset class becoming more mainstream in the property market and so-called ‘silver investment’ being increasingly popular in Germany and neighbouring countries. Historically, the stationary care market has grown by 3.5% p.a. and is expected to continue growing.
TA Europe’s wealth of experience in this sector, particularly across Germany, is instrumental for international investors who may have been previously unaware of Germany’s Federal State building law statutory compliance regulations having some variations between States, such that not every care home concept may fully work in every state or region equally. With every building project it must be taken into account that in the German federalist system the building regulations, such as fire protection regulations, can differ. In the case of nursing homes, various States have developed their own requirements with regard to building specifications for nursing homes that deviate from the nationwide regulations (HeimMindBauVO) Requirements on general home or room sizes and aspects like single room ratios may vary from State to State and can be subject to changes and adjustments.
Detailed requirements of specific needs and uses within care homes are:
- whether that be for senior residents or dementia patients
- more specialized care units, such as serving as drug rehabilitation and recovery units
- mixed-use properties with medical and clinic facilities
- care homes including staff apartments or other residential units
- tenant operator needs serving non-residents, such as day-care, physiotherapy or gastronomy services and offerings
Our team of experts, including architects, MEP engineers and building surveyors, have the sector-specific experience to ensure all technical risks are assessed in advance of an acquisition.
When looking at investments in future care home projects, we also make sure that the necessary ongoing review and monitoring of progress and quality of the design and construction work is in place. By doing so, we ensure that all potential technical risk issues will be reported and duly assessed to protect client needs and investments at all times.
TA Europe has a proven track record in:
- pre-acquisition technical due diligence for single assets or portfolios • fund monitoring for new build construction projects
- conversion projects of buildings to care homes – with previous uses including former hotels, clinics, central post offices, retail properties or schools
- lifecycle and cost management
- technical asset management
To find out more about how our consultants and technical experts can assist you, please contact us.