Old gold

old gold - retirement communities

In a world in which a 90 year old widower goes to work in a Devon café because he is bored at home [1], it is undeniable that we are living longer.  Not everyone, however, remains as fit as Joe Bartley from Paignton, the widower in question.  For those who are merely living longer but suffer from reduced mobility or feel that it would be prudent not to stray too far from medically qualified personnel, there is an alternative that provides health care, social interaction and assistance with domestic chores: the retirement community.

The USA has pioneered the idea of these communities which are more like hotel complexes than hospitals with varying degrees of assisted living for clients.  Companies such as Springpoint are a case in point.  Apartments are ‘sold’ to residents who can move out at any time and recoup 90% of the ‘purchase’ price – or whose children can cash in that sum if their parent/s die in residence.   Medical staff are available round the clock for emergencies or for programmed visits so degrees of assistance can be stepped up or down as health concerns wax and wane.

Retirement communities are big business in the UK too.  Directories bristle with quaint names like ‘The Hawthorns’ or the more eager sounding ‘Silversurfers’  and one retirement specialist, Churchill, has recently beaten all other real estate contenders to be crowned ‘top housebuilder’ for 2016.[2]

Until the recession of 2009, the market for these communities was booming in Spain where the climate could be guaranteed to suit ageing bones rather better than the alternative in Margate.  Britons, Norwegians, Danes, Germans, Russians and the Swiss flocked to seaside facilities where staff spoke English, beer was cheap and proactive medical care was the norm.

These centres were not immune from the economic difficulties of the past seven years but have weathered the financial crisis rather better than other sectors, in part owing to the relatively protected pensions and savings of their customer group.  Meanwhile, publicly funded care homes have suffered from falling staff levels as recruitment and payroll have become the victims of local authority budget cuts.  Sources [3] talk of a 30% staff shortage in some homes, leading to bedsores, dehydration and general neglect among residents.  So the outlook for privately run residential communities looks positive.  And the southern and eastern coasts of Spain are particularly popular.  Cachita Challis, a property consultant  in Valencia, who helps foreigners to find houses to buy, comments:

“Because of its climate, services and infrastructure, in the Costa Blanca, there is a real opportunity to offer bespoke and imaginative complexes aimed at retired people needing support, but wanting to feel independent. There are some already functioning, but a huge and looming niche market for anyone clever enough to develop the concept to another level.”

Market leaders Sanitas (part of BUPA) and Ballesol already operate 85 such centres between them but there is plenty of room for others and some of the construction companies have been combining forces with healthcare providers and venture capitalists to take a slice of the pie.

For newcomers or foreign property investors, Challis recommends the coast at Calpe or Valencia city.  Denia, her centre of operations, is short of land with coastal frontage, as are neighbouring Javea and Moraira.

And for those that don’t find the ideal location for their proposed retirement centre, there is always student accommodation to consider.  This, according to a former industry expert, could be even more lucrative, since funding is easier to arrange and service provision is less onerous.   Companies such as The Student Housing Company, BBVA Real Estate and Azora are active in this area and a number of SOCIMI funds – specialist investment vehicles for the property sector – have been established with this niche sector in mind.

If all else fails, investors can always rely on the most recession-proof of establishments: the ‘tanatorio’ or funeral parlour.  There are, apparently, not enough of these to go round in Spain.  And if more elderly folk retire to Spain, the likelihood is that demand will continue to rise.

[1]  Eager 89-year-old seeks job: cafe snaps him up
[2] Retirement specialist is UK’s top housebuilder
[3] Funding for Spanish nursing homes (Spanish News)