Are retirement villages still the future of elderly care?
Back in 2021 there was a definite sense amongst those involved in Europe’s elderly care sector that investment into retirement villages was set to explode. But in the last couple of years investment into new retirement village sites has stalled. Is this just a temporary blip, or are there more fundamental barriers preventing development in the sector?
This week we reported on Paul Morgan’s findings from his recent trip to New Zealand. Paul Morgan is CEO of Wallacea Living, a luxury UK retirement village provider. Morgan travelled to New Zealand to see what could be learnt from its retirement village sector. In New Zealand 16% of over 65s live in retirement villages, compared to less than 1% in the UK.
Morgan argues that, whilst the sector has suffered from a lack of investment in the UK and other European countries in the last couple of years, the need for the service they provide is still very much there.
He told us: “People need to understand what retirement villages are. Then investors need to have the confidence to come into the sector, and this has been more difficult in the last 18 months, with inflation and interest rates increases and construction costs having gone up so much. Back in 2015 – 2019 you had major financial institutions such as Axa, L&G and NatWest investing in the sector, and it looked like it was set to explode. But if you go to any housing conference or alternative residential conference, people are still talking about integrated retirement communities being the next sector that investors should be looking to, after student housing, or build to rent. The opportunity is still there.”
Morgan believes retirement village living is a better option than homecare, because of the community aspect: “You’re guaranteed better care if you move into a retirement village, because you always have a care team on site.”
Morgan says he makes a distinction between the ‘young-old’, i.e. old people who are still active, vs. the ‘old-old’.
“Our job is to make sure people stay ‘young-old’ as long as possible. If you’re able to help people proactively look after their health and wellbeing in the first four to six years after moving into a retirement community, they tend to not hit that ‘old-old’ stage till right at the end. People that don’t live in retirement villages tend to deteriorate on a slow basis. There’s no reason why people can’t live in retirement villages right to the end. Even conditions such as Parkinsons and Dementia can be managed (unless someone becomes a danger to themselves or others) practically any condition can be managed. It’s the community aspect. If you ask people why they moved in, they say: safety and security, location, and community.
“I do think integrated retirement communities are the future of elderly living. ARCO’s [the Associated Retirement Community Operators] manifesto is right to say there should be at least one in every town. It’s not going to be for everybody, but everybody, regardless of their location or level of wealth, should have the choice.”
Part of the reason New Zealand’s sector is so much more developed is simply that it has been around for longer – the first retirement villages were set up in the 1960s. It will take several years for Europe’s sector to develop, since it requires building entire new communities from scratch. But retirement villages are likely to play an ever larger role in Europe’s elderly care sector in the decades to come.
We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.
