HEALTHCARE

The Housing and Care for the Elderly Programme was presented in November as the sixth programme of the National Housing and Construction Agenda of the Minister of Housing and Spatial Planning. The programme is also part of Wozo (Housing, Support and Care for the Elderly, see also Investment Update August 2022). Among other things, Ministers De Jonge and Helder want to speed up housing and mobility by building specially for the elderly with sufficient facilities in the neighbourhood. In addition, a living environment that encourages exercise and socialising will help older people to stay fit, happy and independent for longer. Of the 900,000 homes to be built by 2030, about a third will have to be specially designed for older people. According to the programme, this will include about 250,000 zero-step and clustered homes for the elderly and 40,000 clustered nursing homes. The programme is in line with the vision of Zilveren Kruis and Syntrus Achmea that 450,000 additional homes suitable for the elderly will be needed by 2040. The National Housing and Construction Agenda, including the Housing and Care for the Elderly Programme, will be translated into regional agreements, including administrative agreements with provinces and municipalities.

After earlier alarm bells from health institutions and various health umbrella organisations, health care has now reached a critical point, according to NZa (Dutch Healthcare Authority) and the Health and Youth Inspectorate. The care we are used to is simply no longer possible,' says NZa chief executive Marian Kaljouw. The demand for care is increasing, while the supply is becoming increasingly scarce. There are long waiting lists and a shortage of care workers. People's self-sufficiency is therefore becoming increasingly important. People and their networks need to do as much as possible themselves to make care accessible to everyone. Finance Ideas sees clustered, care-friendly housing as the key to accessible care. In addition to social housing corporations, institutional investors can also be suitable partners to contribute to a sufficient supply of suitable housing for people in need of care.

The social impact that investors can achieve is obvious. Staffing issues and rising costs are leading to expectations of red ink in financial year 2022 for hospital care, disability care and nursing and care for the elderly, among others. Despite this, the number of bankruptcies in the healthcare sector remains minimal. There were no bankruptcies in the nursing sector in the third and fourth quarters. The number of bankruptcies among curative care providers remained fairly stable, while there was a slight increase among wellbeing organizations.

Caution in the investment market was reflected in rising gross initial yields in the fourth quarter. Initial yields for primary and secondary care rose by 20-25 basis points in the fourth quarter, following a slight increase in the third quarter. In this segment, foreign and debt-financed parties are more common. Declining investor interest is clearly reflected in rising market yields. Initial yields on care and nursing homes also rose by 15-25 basis points in the fourth quarter. On an annual basis, however, the effect is less significant. Yields have changed by between 0 and 15 basis points year-on-year. Projects that are ‘put on hold’ and later restarted will be bought by investors at higher yields. Higher financing rates and general economic uncertainties will temporarily tighten competition for investors. A further rise in initial yields in the first quarter cannot therefore be ruled out. Nevertheless, the investment characteristics of healthcare real estate, such as high demand, remain attractive.