CBRE: ‘At least 1,000 new sites needed for healthcare property’
Additional sites are required to reduce waiting lists and stimulate fluidity in the housing market
The Netherlands needs at least 1,000 new healthcare sites, concludes an estimate by CBRE that is based in part on the current shortage of 80,000 residences for senior citizens, current waiting lists for intramural sheltered housing apartments, and the need of primary and secondary care providers to occupy clustered healthcare centres.
Obstructed fluidity in the housing market
‘Many healthcare operators are searching for suitable sites to respond to the growing, changed demand for sheltered housing – as well as other accommodations – for senior citizens. Finding such development sites often proves difficult, however,’ says Jeroen Hermus, CBRE’s Director of Healthcare. ‘Many municipalities are not yet sufficiently aware of, and knowledgeable about, this aspect of the property market. As a result, too many development projects are cancelled, are given a non healthcare-related destination, or are delayed unnecessarily. If we do not take action, waiting lists will become even longer, caregivers will be burdened even more heavily, and housing market fluidity will be obstructed, in part due to the ageing population.’
Collaboration with municipalities
‘As an example, there are different views of what (health)care functions should be accommodated on a plot with a social or residential destination,’ observes Hermus. ‘Project developers, healthcare operators and municipalities should therefore collaborate to pinpoint and develop suitable locations. Another possible measure would be concrete government incentives. We find that many municipalities are not yet aware of current shortages and the opportunities to tackle them. Even though there are clear advantages: a single new healthcare centre in a municipality may lead to dozens of regular residences becoming available.’
‘What we are now seeing is innovative, successful combined housing and (health)care concepts emerging throughout the Netherlands,’ explains Hermus. ‘Small-scale accommodations offering sheltered housing for say 24 elderly people suffering from dementia are an example. There are about 450 of these in the Netherlands today, and more than half were opened in the past four years.’
‘Innovative large-scale sites have also been opened in recent years where hundreds of senior citizens live who need little to no care or a great deal of care and guidance, all in a single facility. We see more and more of such innovative concepts being realised. Not every healthcare concept fits in with market requirements of a municipality or centre. As such, specific market research and experience are necessary to select a suitable (health)care concept and respond successfully to demand from the market,’ explains Hermus.
Growing investment volume for healthcare property
Investors have been largely responsible for financing recently developed care sites, which is clearly visible when you look at trends in the healthcare property investment market. The investment volume for this market has been growing over de past seven consecutive years. In the past six months a total of €489 mln was invested, representing a 25% growth compared to the same period in 2018. The number of transactions and individual investors has also increased. With an eye to this growth and the current pipeline of investment propositions on the market, CBRE expects the healthcare property investment volume to reach record-breaking heights in 2019, too.
More information on the latest trends and developments in the healthcare property market can be found in our healthcare property report, which can be downloaded here.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.