UK Retirement Real Estate Gets An £800M Investment Boost
Two new joint ventures have been struck in recent days in the UK retirement living real estate sector, which will bring £800M of new investment into the nascent sector.
FORE Partnership has formed a venture with extra care operator Amicala to invest about £300M into building about 1,000 senior living units and is looking for sites across southern and central England. It said it wants the schemes to be “ultra-sustainable net zero extra care communities."
And BlackRock has formed a joint venture with retirement village developer Audley to invest £500M in building schemes that again could accommodate about 1,000 units.
Investors are increasingly being drawn to senior and retirement living because although it is more operationally complex than traditional real estate sectors, the ageing population in the UK is expected to support growing demand for homes aimed at people over 65.
Extra care is a niche within senior living where schemes tailor the amount of care services provided according to the needs of the resident, ranging from relatively little through to full wraparound care. It is small in the UK but is more common in the U.S., Australia and New Zealand, and developers here are betting that the sector will follow the same growth trajectory.
The FORE and Amicala venture is targeting sites in places like Bristol, Brighton, Birmingham, Cambridge and towns within the M25. The first scheme will be in Bristol, where the partnership has purchased a 5-acre former school that comprises 93K SF of buildings, including a Grade II-listed building. The scheme will cost £80M to develop and involve refurbishing some buildings and building new ones, with the aim of it being a net zero carbon development.
“It has been made abundantly clear as the UK has lived through the Covid pandemic that the quality of our homes has a huge impact on our health and wellbeing,” FORE Managing Partner Basil Demeroutis said in a statement. “This is true for seniors as much as anyone and we want to bring our experience in developing ultra-sustainable, thoughtfully-designed buildings to [bear] in creating a new generation of net zero carbon later living developments around the UK.”
BlackRock is investing £100M and taking a 75% stake in its joint venture with Audley, which also has joint ventures with other investors, including Moorfield and Royal London.
The first scheme to be built by the joint venture is a 255-home development in Watford.