UK senior housing investment will top £1.5bn in 2020, says Knight Frank

Tom Scaife

Institutional investment will top over £1.5bn in the senior housing sector in 2020, according to global property consultancy, Knight Frank.

Knight Frank said 2020 had been a record year for the sector although market penetration rates at less than 1% still trailed the rates of 5-6% seen in Australia, New Zealand and the US.

Tom Scaife, Head of Seniors Housing at Knight Frank, (pictured) said: “There is now a clear and extensive range of tenures and offerings available, providing a variety of services and amenities to suit a range of needs, demographics and price points. The investment case remains an extremely compelling one, with the market being driven by demographic changes, seniors’ property wealth, and a weight of capital seeking diversification.

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“With so much activity taking place in the senior housing sector this year, it’s no wonder we’ve witnessed a bumper year for investment.”

Knight Frank said that while retirement housing pricing was largely tracking average residential housing prices in England and Wales, housing with care was outperforming the sector with average property prices increases of 20% over the last five years.

Michael Voges, Executive Director of ARCO, added: “This year our members have reported a sharp increase in demand for retirement communities – particularly in the mid-market. This trend only accelerated during the coronavirus crisis as more older people have sought good quality housing, support, the security of access to care if they need it, and to be closer to community. We are seeing increasing interest in our sector across the board – politically, from new operators entering the market, from investors and from older people’s advocates. We are confident that if the Government implements much needed reforms we will see very significant increases in supply in the coming years.”

Looking ahead, Knight Frank predicts 10% growth in specialist senior housing over the next five years.

However, it added the market would need to grow by at least 400,000 units to catch up with leading overseas markets.

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