By Tom Leahy on March 14th, 2017
Coauthored by Shayan Malik
Europe’s seniors housing & care sector had a banner year in 2016, bolstered by a wider pool of global money, and transactions already completed in 2017 signal that investor interest in the sector is still lively.
Transaction volume totaled €5.7b ($6.1b) in 2016, of which €3.1b was acquisitions by cross-border investors. Alternative real estate classes as a whole in Europe had a record year in 2016 and of these seniors housing is one of the better-established sectors, comprising about 28% of total volume.
Seniors housing is drawing investors who anticipate Europe’s aging population will cause a surge in demand for facilities. RCA data shows there were 34 new entrants into this sector in Europe in 2016.
A total of 54 seniors housing portfolios were traded in 2016, the bulk of which were in Germany, along with other Western European markets such as the U.K., France and Switzerland.
Rising investor demand has also led to larger lot sizes: in 2016 there were 11 seniors housing transactions priced at more than €100m. The buyers of these included Deutsche Wohnen, France’s AXA Group, Lone Star of the U.S. and U.S.-based REIT Omega Healthcare. The largest transaction last year was the Panacea portfolio acquired by French REIT Primonial for €994m.
So far in 2017 24 seniors housing transactions have taken place in Europe, with a third involving overseas investors. For instance, Taikang Life, a Chinese insurer, purchased a share of a U.K. portfolio from Colony Northstar in January.
With a steady pipeline of demand coupled with a stream of new players, brisk activity in European seniors housing is set to continue.