Investment volume in the Spanish’s healthcare and sociosanitary sector has not ceased to grow in recent years, as in all European countries. This trend is mainly due to two factors: first, the consolidation of the living sector as a main asset class compared to other traditional assets, and second, the increase in the number of investors and funds specifically focused on the health space since the beginning of the pandemic.
The population in Spain is experiencing an aging process that has intensified over the years. Since 1950, the percentage of people over 64 years has increased steadily, from 8% in 1950 to 11% in 2009, and now represents 20% of the Spanish population (more than 9.5 million inhabitants), with expectations that this ratio will continue to rise in the coming years.
Prime yields in Spanish senior residences have risen to 4.65% – 4.75% in Q3 2022 (vs. 4.50% as of Q2 2022), influenced by rising interest rates. While the capital values of some assets are likely to remain unaffected in the short term thanks to the impact of inflation on rents.
Strong and growing demand continues to generate a greater need for senior housing in Spain. Between 2008 and 2022, the number of beds grew by 16% to more than 389,000 this year, distributed among more than 5,500 residences. The stock is mainly made up of beds in private residences (60% of the total), which also currently represent the majority of the residences in the pipeline (83% of the total pipeline). Currently, most (48%) of the stock is concentrated in residences with less than 50 beds, although 89% of the pipeline of new beds corresponds to larger residences (more than 100 beds).