Transformation of the Senior Living segment

The German senior living market is facing a profound upheaval. The demand for modern and flexible forms of housing for older people is increasing rapidly, while the existing supply is not keeping pace with this development. This became clear at the online press conference "Investing in demographic change – perspectives in the senior living market" with Jochen Zeeh, Managing Director of IMMOTISS, Michael Eisenmann, Managing Director of Real Blue, and Prof. Dr. Henric Hahr, Head of Portfolio Management at Real Blue, as well as Svetoslav Markov, Managing Director of the Humanika Group.

Today, around 15 million people are already in contact with the topic of care every day. A good 6 million people are in need of care, 8 million take care of relatives and 1.4 million work professionally in care. The number of people in need of care is growing continuously and will continue to increase due to demographic change. At the same time, the expectations of the coming generations of seniors are changing significantly: they stay fit longer, are digitally savvy and want life-like forms of living that enable independence, service and community. Independence plus support while retaining individual living space for as long as possible is the central trend here.

"We are at the beginning of a fundamental redefinition of living in old age," summarizes Michael Eisenmann, Managing Director of Real Blue. "This is a major social task – but also a great opportunity for the investment segment." Jochen Zeeh, Managing Director of IMMOTISS, draws attention to a structural gap in care: "In Germany, only around eight percent of residents aged 65 or over currently have adequate housing and care facilities, which includes care places. However, sufficient care is only available from ten percent. This corresponds to a shortfall of about 400,000 units in senior citizens' housing, including care places." The gap is particularly large in the area of serviced living and assisted living, where long waiting lists and high demand are now the norm.

A major driver of this change is the so-called boomer generation. It is looking for forms of living that offer more than the classic care services. Autonomy, comfort, participation and digital support are at the heart of their expectations. "The older generation of tomorrow can no longer be picked up with the classic care offers," explained Svetoslav Markov, Managing Director of the Humanika Group. "They expect flexible living models, digital support systems and services that can be precisely adapted to their own lifestyle."

Institutional investors are also reacting to these developments. Michael Eisenmann, Managing Director of Real Blue, emphasizes that service-oriented forms of housing are increasingly playing a role in the asset allocation of institutional real estate investors and that the segment is one of the emerging uses due to the long-term megatrend of demographics, its systemic relevance but also its resilience: "We see a clear trend towards concepts that enable independence and are professionally managed. The quality of the operating concept and the experience of the operators are decisive here." Prof. Dr. Henric Hahr, Head of Portfolio Management at Real Blue, adds: "Senior living properties will play an even greater role in real estate portfolios in the future, also in the context of reallocation and transformation strategies and the reduction of the often historically accumulated overallocation in traditional types of use (such as office and retail).

Another key factor for the future of the market is digitalization. Modern assistance systems, intelligent building technology and digital service platforms are intended to increase safety, efficiency and self-determination. "Digital systems can recognize behavioral patterns, report dangerous situations at an early stage and reduce operating costs," says Markov. "This makes senior living not only safer, but also more economically attractive."

However, political support is needed to ensure that sufficient new offers can be created. In particular, the experts mentioned faster and clearer approval procedures, the promotion of affordable housing – for example through KfW programmes – and a more precise legal classification of new forms of housing. In addition, prevention must be given greater priority in order to delay the need for care for as long as possible.