The dawning of 2020 gives us a chance to reflect on what the past decade has brought and what might be in store for the years ahead.
For the senior living sector at least, the past few years have been transformational – the sector is more established than ever before and investors now consider it to be an asset class in its own right.
Major deals such as Riverstone Living’s acquisition of a £300m Kensington retirement scheme, or Audley Group’s joint venture with Schroders and Octopus to deliver 2,000 units nationwide, show the scale at which those in the sector now operate. And new entrants such as L&G’s Guild Living demonstrate the confidence and commitment big investors are showing. We expect this trend to continue, with further management agreements and joint ventures bringing more money into the sector.
That said, despite all this growth and investment, we should not forget that senior living remains a local product designed and built for local people. Understanding this and properly incorporating senior living provision at the early stages of large, mixed-use schemes will reap huge benefits for local authorities, developers, residents and the wider community. As a non-competitor with other forms of residential, well-placed senior living provision only serves to add value to a town’s existing offering and can help marry other complementary use classes together.
However, if land is to be properly directed towards senior living, there need to be more partnerships between operators and builders to unlock key development sites and ramp up delivery. This is something we certainly expect to see more of in 2020 and beyond.
This land will not just be allocated for senior living properties for sale; renting is becoming more popular among seniors and retirees, and developers will have to account for this in the years to come. Indeed, Knight Frank predicts that the amount of UK private rental accommodation will grow by 150% in the next three years, as demand for a flexible, lifestyle-driven offering grows.
This desire for ‘lifestyle’-driven housing will also be borne out in the continued increase of services offered within senior living developments. An improved food and beverage offering, higher-quality leisure facilities as well as other services and amenities will take centre stage, with discreet care provision (whether it be cleaning services, physio or more dedicated medical care) also available as and when it is needed.
Perhaps the biggest change over the past decade, and the one that will continue into 2020 and beyond, is the shift in the public’s perceptions about what senior living developments look and feel like. Ten or even 20 years ago, retirement homes were almost unrecognisable from the senior living developments that exist today, yet some of the stigma still remains. With the fundamentals in place and the property industry now fully in support of senior living as a separate asset class, our challenge is to keep demonstrating to seniors themselves that dedicated developments really are the best way to achieve an independent, sociable lifestyle in their later years.
Tom Scaife is head of senior living at Knight Frank