Spain targets European pensioners | Economy and business


In the Spanish municipality of L’Alfàs del Pi, where almost half of the 20,500 inhabitants are foreigners, there is not a single person who has not heard of Forum Mare Nostrum. It is a residential community for the elderly that has been operating in the province of Alicante, in the region of Valencia, for 20 years. Most Forum Mare Nostrum residents are from other countries, including Germany, the Netherlands, Belgium and Switzerland, with an average age of 75.

The retirement village is hard to miss – it covers 62,000 square meters, has 229 apartments and a central building that provides social, health and cultural services to residents. To live in Forum Mare Nostrum, residents must pay an advance of between €100,000 and €230,000 and pay monthly rent, which ranges from €350 to €950.

Last July, the owner of the complex, Grupo Goya, sold the property to Care Property Invest, a listed Belgian real estate company specializing in housing for seniors, which arrived in Spain in 2020. The sale price was 35 million euros . The retirement village is still managed by Grupo Goya, which now offers rental contracts for periods of 20 years.

It is the first time that an international fund of this type has purchased a residence for the elderly on the Spanish Mediterranean coast. And it is unlikely to be the last. Vanesa Laport, sales director of Grupo Goya, said the company was “in negotiations with several international funds as part of its five-year growth strategy, both from a resort property perspective and as a manager. of these”. The group’s project is to market more senior resorts both in the coastal zone and in the city. Indeed, four other complexes are planned or already underway in the province of Alicante and in Palma de Mallorca, in the Spanish Balearic Islands. Together with Forum Mare Nostrum, which he continues to manage, these properties represent 1,255 homes.

In Spain, people prefer to buy a property and leave it to their children

Juliette Bleekemolen, from Credo España

The sale of Forum Mare Nostrum is a sign of the low but growing demand for retirement villages on the Mediterranean coast. “We have detected the interest of European and North American investment funds specializing in residences for seniors in mature markets such as Germany, Belgium, France and the United States”, says Nuria Béjar, Director National Health and Senior Residence at Savills Aguirre Newman, a real estate agent who advised the sale. According to Béjar, this interest is not only in beachfront residences, but rather in all forms of housing available to independent seniors in Spain.

During the 2000-2008 real estate boom, Spain also tried to become the Florida of Europe and attract healthy international retirees with strong purchasing power. Many of these projects failed or were transformed into other types of housing such as apartment buildings and hotels. But the few that remain, decades later, have become benchmarks for this ever-growing niche market. This is the case of Ciudad Patricia, a seaside resort in Benidorm in the province of Alicante, which has existed for 35 years. In 2005, the complex was purchased by Credo España, a real estate group that is part of the Dutch multinational construction company VolkerWessels.

Situated on a 100,000 square meter plot, Ciudad Patricia comprises five buildings and a central building with a restaurant, bar, library, lounge and beauty salon. A residence for the elderly is also on the property, although it is not owned by Credo España. “We are seeing more investment interest. They are looking for complexes that are already operational, which they know will work,” explains Juliette Bleekemolen, from Credo.

Ciudad Patricia, a retirement village in Benidorm.

Properties in Ciudad Patricia are operated on a lifetime use regime, which means that residents do not own their homes. For a 78-year-old living in the complex, the average cost is around €170,000. Most residents are from the UK and the Netherlands, while the average age is 79 for men and 77 for women. Of its 177 apartments, 155 are occupied and 22 are still available.

The Dutch company also plans to build another retirement community in Sant Pere de Ribes, near Sitges in the province of Barcelona, ​​with work scheduled to start in 2023. This site will offer different types of housing: 209 apartments, 12 chalets, a residence for the elderly. and a rehabilitation hotel, as well as restaurants and bars to help integrate the community.

These properties are more like a hotel than a home as they offer medical assistance and plenty of social activities. They are usually located on the outskirts of large cities, in rural areas or on the coast, as they require large tracts of land. Most of the interest comes from retirees in the UK, Germany, the Netherlands and Scandinavian countries, who seek sunny weather, quality health services and a lower cost of living. In order to move to these retirement communities, most either sell their home in their home country or their property in Spain, given that the vast majority have lived in Spain for some time, Laporta says.

Challenges

The market for retirement communities in Spain, although not large, is growing. But experts warn it still faces challenges. “I have no doubt that the senior resort model will work for the next few years, but at the moment there are no operators; we need a foreign operator or investor with successful cases to come to Spain and replicate the model,” says Alberto Dáiz, managing director of capital markets at real estate company Colliers.

Aitor Pérez, from senior residence consultancy Gerokon, is not so optimistic: “The main limitations relate to their use, given that they are often rotational properties, and the fact that you cannot buy these apartments.”

Moreover, there has so far been little demand from Spanish pensioners. “In Spain, people prefer to buy property and leave it to their children – who take care of their parents – to inherit. Although that is changing,” says Bleekemolen.

The seniors’ resort is just one option for independent seniors. There are also cohousings, colivings and apartments that offer specific services. “At the moment there are more than 20 projects aimed at independent seniors in Spain,” explains Béjar.

Indeed, sources at Savills Aguirre Newman estimate that “2021 will close with approximately 235 million euros of investments and projects with committed investments”.

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