Over 1,300 assisted living premises in Germany, but there is still a lack of supply - report

MoZaïC Asset Management, an independent manager specialising in healthcare real estate, and Bonard, the global market research firm for rented residential asset classes, have published data on the German assisted living market showing the scale of the asset class in the country.

The pair say this ‘first-of-its-kind report’ on the assisted living market in Germany shows there are a total of 1,368 assisted living establishments in the top 20 German cities providing a total capacity of over 64,859 apartments.

However, with the population of over-75s in the cities cumulatively accounting for 1.65 mln and representing 17% of all German seniors, there is ‘clear lack of supply’ to meet the growing demand for assisted living residences, concludes the study.

The Germany Senior Living Report follows earlier work on the French market.

‘We are delighted to introduce the second study from a series of senior living country reports, produced in partnership with MoZaïC AM,’ said Samuel Vetrak, CEO of Bonard.

‘Despite the sizeable pool of potential customers of care service and independent living establishments, the supply remains limited. The provision rate for assisted living establishments in the biggest German cities is below 10%, creating a promising opportunity for the emergence of new developments.’

The companies say the aim of the report is to provide a demand-supply analysis and up-to-date insight into senior living in Germany at the national level with closer look at the top 20 locations across Germany, which ranks third in Europe after Italy and Greece in terms of people aged 65 and over within the total population.

As shown by the report, the senior population in Germany is growing: the share of seniors aged 60+ will increase from 28% in 2019 to 31% in 2025. At the same time, the share of seniors aged 75+ will reach 12% in 2025.

Frédéric Dib, CEO, MoZaiC AM, said, Thanks to high living standards and high-quality healthcare, the share of the population aged 60+ is growing quickly and accounts for 28% of the population. MoZaiC AM has initiated its second report into the senior living market and the first devoted to Germany as an urge to understand a reality which was already a major societal issue, and which, in the crisis of the current pandemic, has been made all the more relevant.’

The care market in Germany was worth almost €58 bn in 2018, of which 36% was dedicated to residential service.

The prime net yield of assisted living establishments in Germany is almost the highest of all real estate assets, achieving 4.5% as of 2019.

Assisted living residences are mainly operated by non-profit organisations, for example charities, which comprise 65% of the supply. An additional 30% are managed by private providers, while the remaining 5% are run by public institutions.

The mapping of the provision rate (beds-to-seniors ratio) across the biggest cities in Germany sheds light on particular opportunities for new residences to be established. The highest rates were found in Bonn (7.7%), Nuremberg (6.9%) and Stuttgart (6.8%), while the average rate stood at 3.9%. Meanwhile, the provision rate of private commercial assisted living specifically fluctuates at around 1% and in no case exceeds 3.2%.

The residences in cities in western Germany are the most expensive. The average monthly rent for a 1-bedroom apartment in Köln stood at €2,346. The prices for apartments differ rather significantly even within the same city according to the class of the residence and range of services; hence, such gap in rent can reach €1,500 per month.

Despite the boom in assisted living construction, planned new assisted living capacities will not satisfy the growing demand generated by an aging population. By 2025, the provision rate will decline in almost all the top 20 cities (except Duisburg), which creates opportunities for providers to enter the market with a high-quality service.

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