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European senior care investment market poised for growth despite COVID-19

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The European elderly care property investment market remained buoyant despite the challenges posed by Covid-19 as investors remained confident in the long-term opportunities presented by the elderly care market with €7.2bn of transactions last year, according to research from global property adviser Knight Frank. This comes as the number of Europeans over the age of 65 is projected to grow by 50% within the next 30 years, from 100 million at present to 150 million. This is anticipated to drive demand for elderly care beds, particularly for full-time nursing care delivered in specialised facilities. Investors seized upon this trend, as well as the increasing consolidation of European markets which has taken place over the last decade, to invest a record €8bn in elderly care and senior living in the four quarters to March 2020.

 

Given these demographic and market factors, an increasingly wide array of investors is seeking out the opportunities presented by elderly care. The market, which has historically been state-controlled across the continent and has suffered from decades of underfunding by successive governments Europe-wide, has, in recent years, become increasingly dominated by private sector ownership, led by mature markets including the UK and Germany. This has addressed funding and investment shortages across Europe and transformed many domestic healthcare markets into pioneering systems, as is the case with the Netherlands’ specialist memory care services.

 

Alongside increasing private ownership, the investor profile in pan-European healthcare markets has become more international in recent years. While domestic buyers still lead the line in countries whose competitive environments favour local players, such as the UK, France and Belgium, overseas buyers have accounted for 43% of European transactions since 2016, spearheaded by specialist listed investors such as the French and Belgian REITs.

 

The combination of COVID-19, increasing globalisation and major demographic shifts has highlighted the profound disparity in healthcare investment between European markets. Germany and the UK, the continent’s largest and most accessible healthcare markets, remain fragmented with the top 5 operators holding only a 12-13% market share in these countries. Meanwhile, universal elderly care is a less developed concept in some Southern European countries such as Spain or Italy. However, with the over-80 population in Spain set to double by 2050 and Italy set to have the world’s second-highest proportion of over-80s (12.8%) by the same point, international operators and real estate investors are beginning to cut into these markets.

 

Julian Evans, Head of Healthcare at Knight Frank, said: Demand for elderly care across Europe has remained high throughout the past few years, driven by demographic shifts and changes to domestic and international markets. Undeterred by the pandemic, investors have helped to address critical funding shortages across the continent and have transformed the landscape for European elderly care. An ageing population, the increased globalisation of elderly care and the spotlight shone on the importance of elderly care by the pandemic have all contributed to an increased appetite for healthcare assets, a trend set to continue going forward. The years ahead will undoubtedly bring challenges as investors tackle the post-COVID landscape, but confidence in the sector remains high and we expect to see a continued reweighting of investors’ portfolios toward alternative real assets. The sector’s potential for strong returns is attracting a broad church of investors, and favourable trends taking hold across Europe are likely to increase this interest.”

 

The trend toward greater internationalism in healthcare provision, which has been brought into especially stark focus by the COVID-19 pandemic, has led to renewed attention to European healthcare. Demand is high and only set to grow in the coming years. An ageing pan-European population and a pandemic-induced step change in the value placed on global healthcare provision are to create a fertile market for both domestic and international real estate investors. Knight Frank expects that after showing resilience in the face of the pandemic and notching near-record investment volumes in 2020, private sector investors in European elderly care are likely to maintain their momentum going forward, expanding in domestic and international markets to satisfy the need for high-quality and future-proof healthcare assets.

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Taoiseach’s family shaped by their working-class roots

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As a special needs assistant at Bunscoil Chríost Rí in Turner’s Cross on the south side of Cork city, Mairéad Martin-Richmond is often asked how she manages financially.

Martin-Richmond, a 59-year-old separated mother of two grown-up children, is a sister of Taoiseach Micheál Martin and says her family’s working-class roots keep her grounded.

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Hines invests in industrial portfolio in Northern Italy

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Hines has reached a binding agreement for an off-market investment to acquire 20 logistics assets located between Emilia Romagna and Lombardy through the Italian fund HEVF II Italy managed by Prelios SGR on behalf of the Hines European Value Fund 2 (HEVF 2). The transaction involves the acquisition of the real estate portfolio from four different selling companies and the simultaneous 15-year lease of the same portfolio to Snatt Logistica Group, a leader in the third-party logistics (3PL) sector focusing exclusively on the fashion industry. The portfolio of 20 logistics assets provides a total of 200,000m² of logistics space around Milan, Parma, Reggio Emilia, and Bologna. They are strategic, well-established logistic centres that enjoy effective, rapid connections with Italy’s main cities and the rest of Europe.

 

“We are pleased to start 2022 with an important investment in the logistics sector that consolidates our presence in the main intersections in Northern Italy. At Hines, we believe in the potential of the logistics sector in Italy and have set an investment target of around €1bn in 2022,” commented Mario Abbadessa, senior managing director & country head of Hines Italy. “We are proud to collaborate with Snatt Logistica Group, which is an international 3PL logistics leader in the luxury fashion industry, and we are certain that we will be able to develop a shared path for growth, guided by common values, including ESG, which is key to our DNA.”

 

Paul White, senior managing director and fund manager for HEVF 2 at Hines, said: “This is an attractive portfolio of assets with a strong, innovative tenant at the forefront of Italy’s fast-growing third-party logistics sector for the fashion industry. We believe that e-commerce will continue to drive long-term demand for high-quality logistics facilities in Italy’s northern cities, pushing the value of these investments forwards, while there is also a significant opportunity to enhance the sustainability performance of existing assets here. This is aligned with our ESG objectives as recognised by GRESB, with HEVF 2 achieving the award of Overall Global Sector Leader in the Diversified Office/Retail category for sustainability performance in 2021.”

 

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Latest Coveney gaffe shows new knack of ‘making small problems big’

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“Don’t mind your press releases,” a Fine Gael source was told by a more experienced hand on their first day in Leinster House; “If you want something out there, just say it in the PP [parliamentary party meeting].”

It’s a truism of Irish politics that these meetings – especially those of the two larger Government parties – leak like the proverbial sieve. This got worse during Covid, when virtual meetings meant members were unencumbered by the need to even appear interested, and journalists were freely briefed in real time. The content of the meeting, coupled with the observations of parliamentarians – arch, knowing, and unfiltered – populated twitter streams and news copy.

So, when Simon Coveney’s remarks about his surprise at the meeting between the Russian ambassador to Ireland and the head of the defence forces were promptly headline news, it can’t have been too much of a shock. “He knows he’s speaking at the leakiest meeting in Leinster House,” observed a source present.

Still, some in the room thought when Michael Creed raised the issue, Coveney would just “warble on like you normally do”. Instead, after a gap of several minutes while other questions were fielded, the Minister for Defence bit down. He said he was “surprised to put it mildly”, several sources present said, and questioned the judgement of it.

Afterwards, sources close to Coveney quickly asserted the Minister meant the tweet from the Russians, and the accompanying picture, were the issue, not the meeting. But multiple sources at the parliamentary party interpreted it as referring to the meeting, and what’s more, as a direct rebuke to the chief of staff. “The tone I got was he was f***ing livid,” said one source.

Either way, the remark was leaked, it was controversial, and early the next morning, Coveney was mending fences in the Dáil, expressing confidence in Clancy and contrition for having brought him into the line of political fire.

A kind interpretation, offered by some at the meeting, is that he feels honour-bound to respond fully to questions from parliamentary colleagues. There is likely truth to that. But equally, many believe he would have known his comments would have been controversial, open to interpretation as a rebuke to the head of the Defence Forces, and that it was meant as a shot across the bows.

Others postulate that – perhaps more worryingly – he didn’t detect the political risk inherent in the remarks, which the Opposition would say had undermined the Chief of Staff . “Simon should have known this was going to result in public comment,” said another person there.

That, in truth is the bigger concern – that Coveney’s bad run of form is down to a blunted political dexterity. “You’d know by the way he said it he wasn’t trying to cause controversy,” one colleague said – adding that it was, however, evidence of Coveney’s new knack of “making small problems into big ones”.

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