In the Alicante town of L’Alfàs del Pi, where half of its 20,500 inhabitants are international, there is not a single neighbor who does not know Forum Mare Nostrum. It is a residential complex for autonomous seniors that has been in operation for 20 years and is attended by mostly foreigners, especially Germans, Dutch, Belgians and Swiss, with an average age of 75 years. Its 62,000 square meters of land do not go unnoticed. It has 229 apartments and a building that centralizes social, health and cultural services for its residents. The model is based on the payment of an advance (from 100,000 to 230,000 euros) and a monthly rent (from 350 to 950 euros). In July its owner, Grupo Goya, sold the resort to the Belgian investor Care Property Invest, who landed in Spain in 2020, for 35 million euros. Now, the complex is operated by Forum de Inversiones Inmobiliarias Mare Nostrum on the basis of a 20-year lease.
This is the first acquisition by a listed real estate fund of a residential complex for the elderly on the Spanish Mediterranean coast. And it will not be the last one. At Grupo Goya they say they are in “negotiations with several of the international funds for their five-year growth strategy, both from the point of view of the ownership of the resorts and their management,” says Vanesa Laporta, commercial director of the company. His plan is to put more centers on the market, both on the coast and in the city. In fact, it has four more complexes in operation or programmed in the province of Alicante and in Palma de Mallorca, which together with the one it has just sold, but is operating, add 1,255 homes.
The operation shows that the wind is beginning to blow from the other side in this immature and scarce market, but attractive. “We have detected interest from European and North American funds specialized in senior living in mature markets such as Germany, Belgium, France and the United States ”, comments Nuria Béjar, National Director of Healthcare and Senior Living at Savills Aguirre Newman, who has mediated in the transaction. It refers not only to beach resorts, but to all the accommodation models that exist today in Spain for elderly people who have autonomy.
Spain has already made a bid to become the Florida of Europe and attract international retirees in good health and spending capacity. He tried it back in the years of the real estate boom. Many of these complexes were destroyed or have been converted (residences, hotels …). A few others have been around for decades and have been crowned as benchmarks in this small market that seeks to lengthen its shadow. This is the case of Ciudad Patricia, a resort in Benidorm, which has been in operation for 35 years and bought in 2005 the group Credo España, which is part of the Dutch multinational construction company VolkerWessels.
It is located on a 100,000 square meter plot, consists of five apartment blocks and a central building with a restaurant, bar, library, lounge, beauty center … There is also a geriatric residence, although it is not owned by Credo. “We are seeing increased interest from investors. They are looking for complexes that are already operational, and they know they work ”, says Juliette Bleekemolen, from Credo.
The way to reside in Ciudad Patricia is through the purchase of the lifetime use of the houses, not the property. The average price for a 78-year-old person is about 170,000 euros. Most of its residents come from England and the Netherlands and the average age is 79 years for men and 77 years for women. Right now, there are 155 occupied apartments and 22 available.
The Dutch group has another complex in operation in Sant Pere de Ribes, next to Sitges (Barcelona), whose works will begin in 2023. The next model will house different types of accommodation: 209 apartments and 12 chalets, a geriatric residence, a hotel for care and rehabilitation, as well as restaurants and bars to integrate the elderly with the entire population.
These complexes that dot the coast are more like a hotel than a house, with health care services and a high level of socialization. They are usually located on the outskirts of large cities, in rural areas or on the coast because they need large areas of land. Its biggest applicants are British, German, Dutch and Scandinavians who seek sun, a lower cost of living than in their countries of origin and quality medical services. To pay for their stay, they usually sell a home they own located in their country or in Spain, since most of them have been living here for a long time, explains Laporta.
The reasons why it continues to be an emerging market and does not drag, at the moment, a strong investment volume are various. “I have no doubt that the model of the senior resort It will work in the next few years, but at the moment there are no operators; we need a foreign operator and investor with success stories to come to Spain to replicate the model ”, analyzes Alberto Díaz, executive director of Capital Markets at Colliers. More obstacles are observed by Aitor Pérez, a partner at Gerokon, who does not see a future for this market. “The main limitations are of use, as it is often endowment land, and the impossibility of buying these apartments.”
In addition, until now it has not been a product in high demand by Spanish retirees. “In Spain, people prefer to buy property and leave the inheritance to their children, who also take care of the parents, although this is already beginning to change. In the Nordic countries people tend to be more individualistic, ”says Bleekemolen. And, for this reason, in its next project in Sant Pere de Ribes, the VolkerWessels group is studying the formulas for the sale and rental of houses “to attract the local public.”
The senior resort it is only one of the forms of accommodation that exist for non-dependent elderly people. Others are the cohousing, the coliving, apartments with services … “Right now there are more than 20 projects focused on non-dependent elderly people in Spain”, points out Nuria Béjar, who cites Forum Mare Nostrum, Ciudad Patricia or Las Arcadias. Alberto Díaz, from Colliers, adds Comuniti San Rafael, in the province of Segovia, a mix between a senior resort and a cohousing. Thus, and for all these typologies, they estimate “that 2021 will end up closing around 235 million between investment and projects with committed investment,” they indicate in Savills Aguirre Newman. The areas with the greatest potential to create new supply are Madrid, Catalonia, the Basque Country, the Balearic Islands, the Canary Islands, Valencia and Andalusia.