At first glance, it is a senior housing project like many others: four houses with 62 apartments, 49 of which are for rent, all barrier-free. Those who live here in old age are well looked after, because the building also houses day care, a doctor’s surgery and physiotherapists. Only at second glance does the residential complex, which will be built this spring in the climatic health resort of Lindenberg in the Allgäu, stand out from the crowd. The special feature: the rent is capped at a maximum of twelve euros per square meter. And this despite the fact that no cooperative is building here, nor is there a charity, but a project developer who sells his buildings to professional investors – pension funds, insurance companies or investment companies.
This has always been the case with office buildings, chic residential or commercial parks. It is new for affordable, especially subsidized housing. For a long time, they were considered too low-yielding for institutional investors. But that is about to change.
GBI Holding AG, which is building in Lindenberg, started specializing in subsidized and low-priced apartments a few years ago. The GBI now builds several hundred of these per year, including barrier-free units especially for seniors since 2019. As in the Bavarian town of Heroldsbach, where a complex with 25 social housing units suitable for the elderly, complete with day care, doctor, pharmacy and hairdresser, was built.
A residential complex for seniors that will be built this spring in the climatic health resort of Lindenberg in the Allgäu. The special feature: the rent is capped at a maximum of twelve euros per square meter.
(Photo: Silvia Obert-Zeeb/GBI)
“Finding investors is no problem at all,” says Simon Hübner, responsible for housing on the GBI board. “Many would prefer to buy an entire portfolio.” This is good news for people who depend on inexpensive housing. If investors want to buy social housing, then some will be built.
There are three reasons for this development. First, the demand from tenants is enormous – owners don’t have to worry about vacancies. Secondly, the yields, at just under three percent, are only slightly below those of many conventional properties. And thirdly, there are requirements from Brussels, the so-called ESG standards, which investors must meet if they want to adorn themselves with the ESG label “sustainable”: E stands for Environment (environment), S for Social (social) and G for governance (good corporate governance).
“We are in a transformation. Investors are increasingly turning to social issues.”
Initially, green building was the focus of the standards, but now it is increasingly about social issues. In the “Global Investor Outlook Report 2022” by the real estate service provider Colliers, eleven percent of those surveyed in Europe said they wanted to invest in affordable housing.
“We are in a transformation. Investors are increasingly turning to social issues,” says Susanne Eickermann-Riepe, Chairwoman of the Institute for Corporate Governance in the German Real Estate Industry (ICG). “This can also help to eliminate deficits.” For example, the lack of senior housing on the market.
By 2035, the proportion of people of retirement age in Germany will increase by 22 percent, with serious consequences for the housing market. “At least 2.5 million barrier-free apartments are already missing, and the trend is rising,” says a position paper from the consumer advice center and a dozen other associations. The need for investment is correspondingly high: In a study by the Pestel Institute in Hanover, the scientists came to the conclusion that around three million additional senior-friendly apartments will have to be built nationwide by 2030.
Seniors often not only live in apartments that are not age-appropriate, but also in apartments or houses that are far too large and many of them are unable to maintain. The widow alone in a terraced house, the pensioner in a spacious apartment in an old building – everyone knows such examples. At the same time, young families often look in vain for exactly such properties. And even if old people were willing to move to a new apartment suitable for senior citizens, many of them could not afford it because the new rent would be higher than the old one.
“Retirement housing will be an issue for the mass market in the future.”
“Lively”, a new provider of serviced accommodation in Hamburg, is one of those who want to change that. The concept is a mixture of a hotel with an outpatient nursing service and a large shared flat with lavish common areas that offer plenty of space for encounters: roof terrace, living room, communal kitchen, sauna, co-working, even a studio. Seniors should feel well looked after here and not feel lonely at the same time. All apartments are barrier-free and can be retrofitted as required, for example with support handles.
Lively was founded in 2021 by two young people from the hotel industry, Constantin Rehberg and Christina Kainz. An important investor is the Berlin real estate investor “Neworld”, which wants to invest sustainably, especially in social real estate. “Housing for the elderly will be an issue for the mass market in the future,” says Neworld Managing Director Alexander Lackner. “But very little is created in this area, which is also affordable for the majority of people.” At Lively, a 35 square meter apartment should cost less than 1,000 euros – warm, including ancillary costs and use of the common areas.
The first quarter is being built in Gronau, Westphalia, in the renovated industrial monument “White Lady”, a former spinning mill. In addition to 123 Lively apartments, the complex will also have a café, day care and nursing places. The new chain wants to open two to four locations a year. Founder Rehberg dreams of a Germany-wide network of age-appropriate quarters.
So something is happening on the market – but gaps will still remain. This applies above all to metropolises, where high building land and construction costs quickly exceed calculations for cheap new buildings.
Affordable multi-generation homes for people with dementia and nursing homes are to be built near Munich
So far, the construction of subsidized senior citizens’ housing is “a niche within a niche,” says GBI board member Hübner. In the future, however, the topic will gain massively in importance. The next project is already pending for his company: In a community outside of Munich, a building with a combination of social center and apartments is to be built.
From the point of view of the social housing companies, private investors are welcome. “We welcome it when new players get involved,” says Tobias Straubinger, spokesman for the Association of Bavarian Housing Companies, whose members have been active in the field for a long time, also with innovative solutions. The Maro cooperative from Ohlstadt in the Garmisch-Partenkirchen district, for example, builds multi-generation houses and sometimes integrates dementia and care flat shares. There are also good approaches in other federal states: For example, the municipal housing company Gewo in Speyer has consolidated a settlement with small apartments suitable for senior citizens. Elderly residents can move there without leaving their quarters.
“In view of the enormous demand, every project helps,” says Romy Reimer, project manager at the “Community Living Forum” in Hanover. It is important to them that investors do not view the apartments as speculative objects, but rather consider the residents and their needs. “That’s a quality indicator for me.”
GBI board member Hübner sees it similarly. “We want to think bigger about the topic in the future,” he says. That means not just erecting individual buildings, but talking to the local authorities at an early stage about the design of entire districts. Whether something is senior-friendly or not ultimately depends not only on the apartment, but also on its surroundings.