Study on healthcare real estate: Germany and France are the most attractive countries for investment

  • Significant cultural differences in planning for retirement
  • The French are European leaders in personal retirement planning

In Europe, there are significant cultural differences in how people plan to spend their retirements. This is one of the key findings of a recent survey commissioned by Primonial, the French partner of AviaRent Invest AG. Primonial surveyed around 4,000 European seniors in the four most populous euro zone countries: Germany, France, Spain and Italy. Fifty-tw0 percent of French people rely primarily on themselves for their long-term care arrangements, well above the proportion of Germans (26%), Italians (29%) and Spaniards (21%).

Spaniards (48%) and Germans (40%) are most likely to rely on their spouses in old age. The same applies to Italians (35%), although 28% say they will rely on their children to assist them as they get older. In southern Europe, inter-generational solidarity appears to be more prominent than in the north.

“The disparity in family solidarity in Europe seems to be directly related to the comparatively much higher levels of investment in northern Europe. Germany and France invested EUR 1.5 billion, three times as much as Italy and Spain in 2017”, says Mathias Giebken, CEO and founder of AviaRent Invest AG. “The study also concludes that Germany and France are the most attractive countries for investments in healthcare real estate because of their high purchasing power and demographic potential”.

While the markets in Germany and France have the most attractive risk-return ratios, Spain and northern Italy are more balanced markets in terms of longer-term investment opportunities and demand. At the same time, the 6% prime yields on investments in these southern European countries in 2017 were higher than the 5.0% to 5.5% yields in Germany and the 4.2% to 5.25% available in France.

“By 2050 the proportion of the population over the age of 80 in Europe will more than double as the generation of baby boomers ages. Given the fact that there is already very strong demand for care facilities, we are facing an acute housing problem across the whole of Europe. In Germany alone, around EUR 80 billion will have to be invested in new and modernised care facilities over the next ten years”, says Giebken.

The study by BVA Opinion also concludes that there is an investment potential of several billion euros in healthcare real estate to redress the existing undersupply of nursing places. Due to the massive effects of demographic change, public health care funds will be limited by budget constraints, especially in Europe, and the private sector will play an increasingly important role. “In future, investors should increasingly develop partnerships with international players who focus on urbanised and qualitative locations with high purchasing power and strong demographic potential”, says Giebken.

“The decisive criterion is the choice of location. Proximity to city centres or to larger metropolitan areas should be ensured in order to guarantee high market liquidity. We also invest in rural regions, but only where our intensive location analyses have registered net population growth. We are certainly seeing growing interest in larger-scale developments and our Assisted Living Plus product line, which creates senior residences with a neighbourhood character. Demand is growing for small residential parks, communities with day-care centres, shared canteens and outpatient care. We are seeing a real shift away from pure care facilities towards new forms of living”, confirms Giebken.

In 2017, AviaRent and the asset management platform Primorial formed a strategic alliance to strengthen their position in the field of social infrastructure. With a fund volume of more than EUR 5.5 billion, the two partners are focussed on internationalisation, growth and market leadership. This strategic alliance also aims to address the challenges of demographic change and make sustainable investments in the future of our society.

The full study “Advanced Ageing in the 21st Century in Europe: Expectations for Healthcare Real Estate” is available free of charge:
Read study

About AviaRent:
AviaRent Invest AG, headquartered in Frankfurt am Main and Hamburg, is a subsidiary of AviaRent Capital Management S.à.r.l, a Luxembourg fund company. Together with its French partner Primonial, one of the leading European asset management platforms with fund assets of more than €23 billion, AviaRent has a combined fund volume of more than €5.5 billion in the care and education sectors. As a specialised asset manager, AviaRent invests exclusively in social infrastructure. The AviaRent portfolio consists of care properties with around 5,200 nursing beds, 1,200 assisted living units, 2,000 places in day-care centres and 2,300 micro-apartments. For more information, please visit:
www.aviarent.lu