Senior resorts are tourist-residential complexes that are composed of individual housing (such as two or three-room apartments, villas or farmhouses). These individual houses are built around one or many central buildings which feature different services —medical and assistance facilities, and places for dining, leisure, security and culture, all of which surrounded by large green areas. They include specific sports facilities as well, and many support services aimed at the community living at the complex.
These residential areas allow access to guests above the age of 55 in order to ensure a quiet environment. As a complementary element to the complex, they usually have nursing homes for those guests living in their last stages of life.
Indicators
The market for senior resorts and nursing homes for the elderly is becoming a more professional market. The seven largest Spanish companies operating these services control only 17% of its capacity.
This market is one of the branches in the real estate industry with the most business potential, which is a consequence of the imbalance between demand and supply that currently exists. There are also other reasons for this branch to have that much potential, which include the following.
The first one is that, in the next 12 years, the population over 65 years old in Spain will grow from 19% to 25%, and in 2050 it will be 38%. The dependency ratio in Spain will become almost 46.5% in 2040.
The second reason for this business potential is that, at nursing homes, Spain’s number of beds per 100 people over 65 years old is 4.3%. It should be taken into account that the World Health Organization recommends this number to be 5%, and that the European average is 4.6%.
Other reason is that important corporate actions have been registered within this field. Between 2015 and 2017, there have been corporate actions amounting to more than 2,000 million euro.
This sector also owes its potential to the market maturity in this sector. This market maturity offers a strong business opportunity for rehabilitation projects and new building projects.
Fifth, this is a resilient sector. This market is characterized by having high occupancy rates, thus resulting in stable cash flow.
Moreover, this sector offers on-demand services, which is a concept new to persons aged over 60 years old. The smallest entrepreneurs, noticing such a competitive context, are now entering the market.
A Positive Macroeconomic Context
There is a GDP growth of 2.2%, which is above the European Union average.
The unemployment rate is 14.2% in 2020.
There has been a rise in private consumption.
Activity in Real-Estate Investment
Investors are abandoning traditional, consolidated products and are moving towards alternative products. The reasons for this are as follows.
The lack of quality products with a reasonable price.
A low profitability. A devaluation of European bonds, which are at historically low levels.
A high liquidity and favorable terms and conditions for financing.
Investors’ Increased Interest for Alternative Sectors
The evolution of the real estate industry in recent years goes from the economic crisis in 2010, the economic recovery in 2013, the confidence of the real estate industry in 2015, and important real estate investment options in alternative products in 2017.
This interest that investors have in looking for new kinds of investment is caused by many reasons. First, because of the lack of products of traditional assets in the real estate sector. Second, by reason of the low profitability of these traditional products. Lastly, due to the fact that there is currently a good availability of capital, as well as a good financial availability.
The Market of Senior Resorts
The potential customers of Senior Resorts can be found predominantly in a European audience, and are mainly German, Dutch and English. There is also an increasing American audience of potential customers who sell their homes and are seeking for destinations with a better quality of life.
In the year 2050, over 25% of the European population is estimated to be over 65 years old. It is worth noting that Spain is the 9th country that appears on the list of the top 10 countries that are of relevance for the concept ‘retirement community’.
For this target audience, Spain has a lot to offer. It has very good weather conditions, a stable economic system, competitive and favorable prices compared to the cost of living in these potential costumers’ home countries, modern infrastructures, a good level of services and, above all, it represents a safe destination.
Having mentioned all that, the Costa Daurada stands out as a favorable destination, a place requested by many for the coming years in this market, the market of senior resorts.
Access Modalities
Housing in these senior resorts operates with sales and different kinds of rental. Some of these rentals present a rotation of tenants and others are life leases.
Recent Investment Activity
Examples of recent investment activity include the main operators Domus* (PAI Partners – Geriatros), ORPEA, Vitalia Home, Ballesol*, Amavir*, Sanitas* and La Saleta.
*These operators are active in Catalunya.
Indicators of Motivation
Spain has the highest life expectancy in Europe —86 years old for women and 80 for men.
In 2050, it is estimated that 38% of the population will be over 65 years old in Spain.
In Spain, there are currently 5,520 nursing homes for the elderly (75% of which are private and 25% of them are public) and almost 376,000 beds.
In Guasch Asesores Inmobiliarios, we are pioneers in the study of senior resorts in Spain, for it is a business with positive future prospects. This positiveness is based on many facts: the progressive aging of the European population, the increase in the potential demand for places in private nursing homes, the increase in independent elderly people, the higher acceptance of this option versus nursing homes, and the expected increase in the influx of tourists with the long-awaited recovery of the European economy.
All these factors make new investors look for lands which are prepared to develop their project. We are handling the process of counseling and attracting investors for the development of this sector, which is currently being highly relevant in our country.
Do not hesitate to contact us for more information. We remain at your disposal to help you, to advise you on the market of senior resorts, and to solve with greater efficiency any doubt that you may have about this real estate market in the Costa Daurada.
For Sale an Exclusive Plot of Land to
Development project Aparthotel & Resort "Senior Living" 162 Apartments with services and common spaces Costa Daurada - Spain
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