Healthcare Vital Signs

Retirement Living continues to be an immense growth sector in the UK with many new investors and models entering the market. As the Retirement Living sector continues to evolve, there are a few key trends that we predict will develop or continue to develop in 2019. EMERGENCE OF A MIDDLE MARKET PRODUCT Historically, over three-quarters of the retirement living product in the UK has been made up of affordable or low-end units. The product was considered simply a housing option for older people, with minimal services and without a care provision. Audley has been a market leader in delivering high-end retirement living product, but, more recently, there has been an increase in the amount of high-end product entering the market from groups including Elysian, LifeCare Residences, and Auriens, amongst others. A model that is far more common in the US, the rental retirement living model is beginning to emerge within the UK. The UK market has been tentative to adopt the model with hesitations arising from how consumers will perceive rental property. The Hawthorns rental model has proved to be largely successful to date and Birchgrove, backed by Bridges Fund Management, is the newest entrant into the rental space. Birchgrove’s first development in Sidcup is expected to deliver in Spring 2019 and has had positive preleasing momentum. As the retirement living sector continues to evolve in the UK, we predict that it is likely that there will continue to be a mix of tenures offered, with new players entering the rental space, especially in urban markets, and maybe even from the US. RENTAL MODEL There remains a severe lack of product that services the middle-market and is affordable to the greater population. In the retirement living space, the middle-market consumer has largely been ignored to date though a few groups like Audley’s new Mayfield Villages brand, have begun to capitalize on this disparity in the market. We believe there is real opportunity for additional middle-market brands and product as most of the demand sits within the middle- income bracket and much of the ageing population is priced out of the luxury accommodations available to date. 2019 trends IN RETIREMENT LIVING 6 | CUSHMAN & WAKEFIELD