Bumper year for senior housing sector

Our market-leading research examines the fundamentals of the private senior living market, from sales to operations, sharing the results of our survey of some of the leading operators in the sector.
Written By:
Oliver Knight, Knight Frank
1 minute to read

It is forecast that institutional investment into the UK senior living market will top £1.5 billion by the end of 2020 as an increasing number of investors recognise the potential for growth in the sector, underpinned at its core by rising demand and a lack of adequate supply.

For the senior living sector, the past few years have been transformational – the market is more established than ever before and investors now consider it to be an asset class in its own right.

It is against this backdrop that we have worked with a number of leading operators on the 2020 Senior Housing Annual Review to give a unique and detailed insight into the operation and performance of existing schemes and the profile of residents who live within them.

The results highlight the diverse sources of income – across different departments and timescales – with deferred management fees, rent, management and service charges, ground rents, care and wellness, and food and beverage all contributing.

Operating costs, meanwhile, are dominated by staffing and can extend beyond single assets to head office functions. In addition, we have analysed more than 16,000 senior living property sales across the private sector to give a view on pricing and price change over time.

Lauren Harwood, Head of Seniors Housing Research at Knight Frank, said: “It has, arguably, never been more important to have high quality data to assist with investment decisions and move the sector forward.

“In the next five years, we expect to see a race to scale and brand building from some of the early movers to create management platforms with operational efficiencies. Accordingly, we expect the number of specialist seniors housing units across the UK to grow by approximately 10% over this time.”