Osaka: One of Japan’s four largest cities. [Image: Nomadic Julien/Unsplash]

Axa IM Alts makes €156m first foray into Japanese care homes

Axa IM Alts has made its first investment in the Japanese care home market with a €156 million portfolio acquisition.

The company has acquired a portfolio of 15 nursing homes located in Tokyo, Osaka and Aichi, three of Japan’s four largest cities, with significant aging and affluent populations. Axa IM Alts paid €156 million (¥21.9 billion), including acquisition costs for the portfolio, which has a total of more than 800 beds. Fourteen of the homes were constructed after 2013.

The portfolio is let to five established operators and leases have a weighted unexpired average term of 19 years.

Axa IM Alts explained in a statement that the Japanese care home sector is characterised by a shortage of good quality stock, with the demand/supply imbalance expected to widen as Japan’s elderly population increases. Numbers of over 65s are forecast to grow by 20% over the next 20 years but the sector has strong support from the government, which has committed to increase elderly resident capacity from 2.5% to 4% by 2030.

This deal is Axa IM Alts’ fourth acquisition in Japan this year and increases its assets under management there to about ¥511 billion (€3.5 billion). It was also part of Axa IM Alts’ long-term strategy to invest into residential asset classes.

“This is a rare opportunity to acquire a modern and diversified portfolio of care home assets with an attractive trading history, in a fast growing but still highly fragmented use class,” said Laurent Jacquemin, head of Asia-Pacific, real assets at Axa IM Alts. “Establishing long-term relationships with leading operators will allow us to quickly scale our platform, in a sector we view as highly defensive and benefitting from the tailwinds of compelling long-term demand supply dynamics.”

Author: Paul Strohm

Source: Real Asset Insight

Senior housing & healthcare session at Expo Real

EXPO Real: Interest rate hikes halt Senior housing deals

Demographic fundamentals underpin future demand but current market conditions have brought transactions to a standstill, experts agreed at Real Asset Media’s Senior Housing & Healthcare briefing, which took place yesterday at the International Investors Lounge at EXPO Real.

“Investors are not able to pay the same prices, as rising interest rates are making financing more expensive”, said Nikolai Schmidt, Managing Director, Transaction Health Care, Swiss Life Asset Managers. “The main challenge over the next twelve months will be finding an equilibrium between the price situation on the market and our yield expectations”.

It will take a while to find this balance, and in the meantime there are likely to be very few transactions in the market.

“In my experience transactions are either on hold or have been cancelled”, said Stefan Voss, Partner, CMS.

The market situation is particularly challenging for project developers. With high financing costs, high construction costs and high land costs, something’s got to give.

“The challenge for developers is accepting that land values will have to come down, a haircut is inevitable”, said Marcus Roberts, Head of Europe, Savills Operational Capital Markets.

Investors are increasingly anxious, said Yeliz Bicici, Chief Operating Officer Offices & Real Estate Development, Cofinimmo: “There is a growing uncertainty about pricing and the evolution of the operational business model, but on the other hand it is clear that the need for care is increasing”.

The top seven countries in Europe (UK, Germany, France, Italy, Spain, Belgium, the Netherlands) already have 75.5 million people aged over 65, and that number is set to increase significantly.

Rising demand will continue to drive the market, while he counter-cyclical characteristics of the healthcare and senior housing sector have driven returns, which have been higher than in other real estate sectors, according to Savills data.

“Total investment has risen significantly over the past few years, with €5.7 billion invested in 2021 in the top seven European countries, compared to an average of €2 billion a year between 2013 and 2018”, said Roberts.

Author: Nicol Dynes

Source: Real Asset Insight

Dr. Stefan Voß, Partner, CMS

CMS overview of the auditing institutions at the senior housing and healthcare sector in Europe

As part of our governance research, CMS, the SHHA member, did a deep dive into auditing institutions in key European markets.

In the UK there are four jurisdictions with different regimes in place to regulate and monitor the safety and quality of healthcare and social care/care home services. Although the overarching aims and objectives are very similar, each regulator’s processes and procedures are nuanced and in practice dealings with them can be varied.

In Austria each Federal State operates its own Care Home Supervisory Authority. They are responsible for the supervision of institutions that primarily provide long-term care, while medical service by doctors is limited to a case-by-case basis.

In Belgium The ‘Care Quality Commission’, an independent regulator of the health and social care system in England is responsible for auditing the care institutionst. However, Belgium does have the ‘Service Public Fédéral (SPF) santé, sécurité de la chaîne alimentaire et environnement’ to monitor the health care system.

In Germany each federal state has established a care home supervisory authority which supervises and advises care homes (including housing for senior citizens, short term care, hospices, nursing homes, assisted living (in some federal states)) with a main focus on protecting the interests and needs of the occupants. Additionally there are 15 regional medical services (“MD”) in Germany which have various responsibilities in the health sector. MD assists the health and nursing care insurance companies with medical and nursing care-specific matters.

In The Netherlands The Ministry of Public Health, Wellbeing and Sports (VWS) is the coordinating government body concerning matters of health and eldercare in The Netherlands. The VWS delegates it’s responsibilities concerning healthcare to a number of internal subdivisions and external affiliated institutions.

Norway has no supervisory authority relating specifically to the care home sector. However, all care service providers in Norway, including care home operators, whether operated publicly or commercially, are subject to supervision and government by the Norwegian Board of Health Supervision (Helsetilsynet), a national supervisory authority organized under the Ministry of Health Care Services.

To learn more download the full CMS report with details regarding selected countries.

Interview with Raoul Thomassen, Chief Operating Officer, AEDIFICA

Meeting the demographically driven demand for healthcare real estate

Interview with Raoul Thomassen, Chief Operating Officer, AEDIFICA

Aedifica has had an intensive time in terms of its development in several European markets, while at the same time it has stepped up its sustainability ambitions by developing a new CSR framework. Can you tell us about the context of the new strategy?


We have structured our strategy around three pillars – our portfolio, our partners and our organisation. Within each of these three pillars, there are several actions that help us – as a future-proof organisation – to have a future-proof portfolio

When we talk about our portfolio, we talk about our ambitions to achieve net zero emissions by 2050.

When we talk about our portfolio, we talk about our ambitions to achieve net zero emissions by 2050. Aside from our intrinsic drive, this externally demanded by governments shaping regulations to achieve that goal, as well asfrom it from the investor side – investors expect us to develop a sustainable portfolio. We have been actively working on that, including by making our reporting more transparent.

We need to make sure that we are and remain an attractive employer in all eight countries in which we operate.

Another important aspect of our new framework concerns HR. As our portfolio grows, so does the number of people working in the company. We need to make sure that we are and remain an attractive employer in all eight countries in which we operate. To monitor that, we conduct an employee satisfaction survey every year to see if our staff identify with Aedifica and feel happy with us.

When it comes to our partners, we are talking first of all about the operators of our care properties who provide care services to residents. We work closely with them to make sure our buildings are of excellent quality when we deliver them and are well maintained throughout their lifespan.

Because we work with many partners, we have designed supplier charters that allow us to clarify what Aedifica expects from its partners and vice versa – what an operator or developer can expect from us.

Other key partners for our growing portfolio are developers. Because we work with many partners, we have designed supplier charters that allow us to clarify what Aedifica expects from its partners and vice versa – what an operator or developer can expect from us. These include CSR aspects, which range from ensuring that no child labour takes place within the entire supply chain, to environmental aspects when using detergents or cleaning materials in order to ensure that they are not hazardous to the environment. All these aspects are covered by our three-pillar strategy.

What is the nature of the relationships between each of the groups you mentioned and what role does each group play in the value chain?

The future needs of the elderly will increase significantly from 2025, when the baby boomer generation will be over 80. In particular, we are actively working with operators and developers to see how we can anticipate this increased demand. At Aedifica, we have a three-party agreement: we work with both developers and operators – the future tenants of our buildings. They will rent and operate that building for the next 20 to 30 years, so we want to make sure that when something is built, it fully meets their requirements. This is one of the most tangible ways in which these three elements work closely together from the start.

You can imagine that especially in developments, local authorities also play an important role in zoning because of the specific local needs they see. It is very common, or it is becoming more common, for a nursing home to be built not just as a stand-alone facility, but rather as a mixed-use development combining elderly care with child care and independent living, for example.

Senior housing and healthcare is often seen as an operator-driven market, and the reputation of the operator is absolutely crucial. How do you select the operators you work with?

We have a very diversified operator base. We work with some of the larger for-profit operators in Europe, but in specific countries we also work with many non-profit operators. For us, it is important that we can work with a party that is a reliable partner for us – which again can be profit or non-profit – in a long-term business partnership. We are not here for a short-term relationship – we are long-term investors and want to make sure we invest and lease to partners who also deliver quality and have the same time horizon.

We are long-term investors and want to make sure we invest and lease to partners who also deliver quality and have the same time horizon.

Working with smaller operators may mean they need more help or more real estate-specific knowledge. For us, this is not necessarily a downside, as we have that knowledge and are happy to share it, since it is beneficial for all parties involved. One example is making buildings more energy efficient. Larger operators have sometimes already developed their own knowledge in that area, but for smaller players our know-how and help is a great added value.


Interestingly, there is a lot of focus on social aspects. How do you ensure the social impact of your business activities in particular?

The social aspect is something we pay specific attention to when we acquire buildings and especially when we develop them ourselves. Authorities are also tightening their requirements in this area. Consider, for example, the Netherlands, where the authorities already require that your care home, when applying for a permit, has a certain minimum rating that is not only based on energy consumption or more traditional parameters, but also specifically takes those social aspects into account. For example, it is crucial that a care home is easily accessible and not too far from the city centre. So we need to ensure that we have buildings that can make their contribution to the local community. Not only by providing employment opportunities, but also by connecting people and providing a place where people from that community can physically come together. A great example of this comes from the Nordics, where parents can pick up their children from day care and visit grandparents at the same time, as the day care and residential care centre are housed in the same campus.

What are you currently doing to reduce environmental impact?

Buildings in general, looking beyond just our sector, are a big factor in global warming. According to research, carbon emissions from buildings account for up to 40 per cent of total emissions, so there is certainly a big role to play in ensuring that those emissions are reduced. If you ensure that you can significantly reduce those emissions, then you are better positioned as a company than other property owners who lag behind in that area and risk being left with stranded assets. We make a lot of efforts in this area. For example, we have established a specific framework for the sustainable development of new buildings in every country in which we operate, making sure that they do not emit more carbon emissions than a certain level we have set internally. Similarly, when acquiring existing buildings, we do not want to acquire buildings that not only emit a lot today, but may also be difficult to renovate tomorrow. These internal targets are critical for us to achieve net zero emissions by 2050.

We have a large existing portfolio. Some of those buildings are relatively young and already quite energy efficient, but there are also quite a few that are older and in need of renovation. And that’s what we need that partnership with the operators for as well: for a smooth process of making the buildings that are renovated in the next five to ten years more energy efficient. Maybe those buildings won’t even be carbon neutral when the next renovation is carried out, but at least they need to become a lot more energy efficient. That’s where we work together and where a lot of the technical aspects come into play. Implementing solar panels is quite easy, but then if you want to switch to low-temperature heating and replace all the windows, suddenly your residents can’t stay in their rooms while these works are being carried out. If you look at the increased energy prices, the discussion with operators working on energy saving has become more important, but also certainly easier in the sense that the urgency and feasibility of projects has increased significantly just because energy prices are now as high.


You are developing your portfolio in different European markets. What are some of the differences between the markets? How much influence does local knowledge have on your development strategy as you look into each country?

That is precisely why we have local teams. Without local teams, it would be difficult for us to grow the portfolio. Local teams have close connections with operators, with development partners, with local authorities… They are therefore a critical factor for us to grow in the markets in which we operate. Local markets are specific, which means there are differences in what authorities require of us. There are differences in the way the healthcare sector is regulated. In some of our markets, that may be at the national level. But in Germany, for example, it is at regional level and there are 16 different regions with their own regulations. These are not fundamentally or completely different, but there are differences that need to be taken into account. We therefore also work with local partners and developers to ensure that we meet all these different requirements. On the other hand, regulations should also not be overestimated. Yes, we want to make sure we are compliant, but in many cases, especially in terms of ESG, we have to go beyond some of the current regulations, simply because we know they will be tightened again in a year or three. We are not building for the next t

Aedifica invests €16 million in the development of 2 care properties in Finland

Aedifica tops up pipeline with Finnish healthcare projects

Belgian healthcare property specialist Aedifica is to invest €16 million in the development of two care properties in Finland.

The firm’s Finnish arm, Hoivatilat, will develop a children’s day-care centre in Espoo. Espoo Ylismäenkuja will accommodate up to 42 children and has been designed and will be developed by Hoivatilat on the ground floor of a larger residential project developed by a third party.

Ylismäenkuja will be operated by Pilke, a Finnish day-care operator that offers innovative early childhood education and care services to over 10,000 children in 173 child day-care centres across Finland, employing approx. 2,000 staff. Pilke already operates 25 Aedifica sites.

Hoivatilat will also develop a care home in the centre of Oulu. Oulu Vaarapiha will be tailored to suit the needs of elderly people requiring continuous care and will accommodate up to 110 residents.

Construction works have recently started and are expected to be completed in the fourth quarter of 2023. Oulu Vaarapiha will be operated by private Finnish operator Nonna Group.

The two projects will provide an average gross yield of 5.5%. Aedifica now has a pipeline of projects across Europe worth about €307 million.

Author: Paul Strohm

Amavir Sant Cugat in Sant Cugat del Valles (Barcelona)

Adriano Care buys two assets and closes on €265m target

Spanish senior home REIT Adriano Care, which is managed by Azora, is investing €35 million in two new nursing home assets in Santander and Sant Cugat.

The Santander asset, located in the central district of Puerto Chico, has 118 beds and is leased to Orpea. The home in Sant Cugat, which has 180 beds, is leased to Amavir. Both have mandatory long-term rental contracts.

Including these acquisitions Adriano, a Spanish socimi listed on the BME Growth, has invested more than €100 million in 2022. Its portfolio is now worth over €235 million including committed investment in developments, and comprises 22 assets with 2,875 beds. About 82% of the portfolio comprises traditional nursing homes and 18% is in the emerging senior living segment.

Adriano’s target is to invest €265 million.

Operators who have leased the assets include Colisee, DomusVi, Amavir, Orpea, Vivalto and Clece.

“Adriano Care remains committed to addressing the growing need for housing solutions associated with an ageing population, adapted to the needs of our seniors and to new real estate trends,” said Concha Osácar, founding partner of Azora.

“With these two new acquisitions, the socimi is making progress in consolidating its portfolio with the aim of completing its investment commitment in the coming months, in line with its objectives.”

Author: Paul Strohm

Source: Real Asset Insight

Jan-Bastian Knod, Cushman & Wakefield

German healthcare investment volumes hit €1bn in H1: C&W

Germany’s healthcare real estate market saw investment transactions worth a total of approximately €1 billion take place in the first half of this year according to Cushman & Wakefield.

The figure was down on the same period last year when assets worth €1.14 billion changed hands, but it was still the second strongest first half in the past ten years, C&W points out.

Part of the Futura portfolio acquired by Primonial.


The second quarter figure, around €430 million, was slightly above the equivalent figure in the previous year. Most of the transaction volume was accounted for by nursing care properties, where deals totalled €357 million.

C&W said that yields are stable and the prime yield for nursing homes was 3.9%, the same as in the first quarter. Yields for assisted living property are between 3% and 3.5% while the prime yield for medical centres and medical care centres is in the range 3.5% to 4%. Yields on clinics and hospitals are about 50 basis points higher.

“Demand for care properties remains high, both among investors already active in the German market and among potential entrants to the market,” said C&W head of healthcare advisory and residential advisory Jan-Bastian Knod.

“The financing environment has changed significantly over recent months. Nevertheless, prime yields remain static for the time being, reaffirming the crisis resilience of healthcare real estate, already proven during the Covid-19 pandemic.”

Jan-Bastian Knod.
About 78% of the transaction volume (€338 million)was accounted for by individual deals although among portfolio transactions, Primonial’s purchase of the seven-asset Futura III portfolio made a significant contribution and C&W said it expects further major portfolio transactions to be completed by the end of the year.

Over 30% of deal volume is accounted for by forward purchases owing the shortage of existing assets in the care sector.

“Higher construction costs, rising interest rates, geopolitical crises and growing inflation rates are causing great uncertainty,” Knod added.

He said that in recent years operators in Europe have become increasingly professionalised and consolidated. Operational platforms have become larger, however, Knod points out that many investors prefer a mix of large, creditworthy operators and small to medium-sized regional companies with expertise in specific markets.

Author: Paul Strohm

Source: Real Asset Insight

70-bed nursing home in Dettenheim, Baden- Württemberg

Dettenheim deal kicks off Kingstone’s €400m care fund

Munich-headquartered Kingstone Real Estate has acquired a 70-bed nursing home in Dettenheim, Baden- Württemberg, in an off market deal with GFS Bauträger und Immobilienvermittlungs. The asset has been bought as a seed investment for open ended healthcare fund Kingstone Living & Care I, which is targeting a volume of €400 million.

Kingstone launched the open-ended special alternative investment fund together with IntReal International Real Estate. Kingstone Living & Care managing partner Paul Muno said that the Dettenheim property is a perfect fit for the fund because “the building quality is outstanding and there is a long-term contract in place with a superbly positioned regional operator.”

The fund has a buy-and-hold strategy and is seeking sustainable properties with established operators across Germany, Muno said.

The Dettenheim building was constructed in 2019 and has a gross floor area of about 4,000 sq m. It is let to operator Incura and has a geriatric-psychiatric living area as well as a ‘young care’ living area for patients under 60 with somatic illnesses.

Kingstone Living & Care was launched in April 2021 as the healthcare investment platform of Kingstone Real Estate whose co-founder and managing partner Bärbel Schomberg is managing director.

Source: Real Asset Insight

Author: Paul Strohm

Juergen Fenk, CEO, Primonial REIM

Fenk’s ESG focus at Primonial REIM

The S in ESG is gaining more and more traction. Companies are discovering that having a positive impact on their workers, their community and society as a whole is not just the right thing to do, but it is also what investors want, as Juergen Fenk, CEO, Primonial REIM explains in the CEO interview in the new edition of Real Asset Impact.

Primonial REIM is the biggest healthcare real estate manager in Europe. The prominent role the asset class has played for the company is the result of close relationships with the large French operators. The largest five operators in France are the largest five in Europe.

The company now has more than €10 billion assets under management in the wider healthcare sector, which includes senior living, clinics, and the entire spectrum, with a presence in seven countries in Europe.

Fenk joined Primonial REIM as chief executive in March 2021 with a goal to turn a great French champion into a European champion. He has pursued an expansion strategy in new markets, opening offices in London and Singapore, but has also kept a close eye on sustainability, systematically integrating ESG criteria into the investment and management process.

ESG is a key element of the company’s strategy at three levels, he explains: the corporate level, which involves activities, labels and instruments; the fund level, which involves transforming funds into Article 8 or into Article 9. And finally at the asset level, which involves collecting all the data and getting the intervention strategy right.

“It’s not just marketing, it’s a real conviction,” Fenk said. “We try to find ways to get to a better world and a better built environment with others.”

Download Real Asset Impact to read the whole interview.

Author: Nicol Dynes

Source: Real Asset Insigh

senior housing in Europe

Kryalos and Euryale team up to create Italian healthcare fund

Kryalos, the Italian asset manager, has signed a deal with Euryale, the French senior living and nursing home specialist, for a €300 million healthcare fund that will target new builds, pre-constructed or refurbished assets in Italy.

Italy has an acute shortage of healthcare facilities and nursing homes, yet it has one of the fastest-ageing populations in the world, being second only to Japan. It is one of the countries with the lowest number of beds in specialised structures for citizens over 65 years of age: 1.86 places for every 100 people in 2021, compared to a European average of five.

Healthcare therefore has huge development potential as the current offer does not remotely match growing demand, especially in the wealthier northern regions of Italy like Lombardy and Emilia-Romagna.

Paolo Bottelli, CEO, Kryalos
Paolo Bottelli, CEO, Kryalos

“The healthcare sector needs a professional and competent approach to real estate investment in order to create facilities that meet the needs of the market in line with best-in-class sustainability criteria,” said Paolo Bottelli, CEO, Kryalos. “For us this fund is important because it allows us to enter a neglected market where we can get to play a significant role and at the same time make a contribution to society.”

The newly-constituted Euryale Healthcare Italia 1, a closed fund reserved for professional investors, targets core investments and its strategy is to promote ESG principles with a long-term horizon, up to 2041.

The two companies have already identified a substantial pipeline of investments, some of which will be realised this year. They include private medical facilities, specialised clinics, intensive therapy centres, diagnostic centres, clinics and care homes.


The deal is part of Kryalos’s strategy to expand its ESG investments, the asset manager said, while contributing to relieving the shortage of healthcare facilities in Italy. Senior citizens’ health and quality of life are seen as key both by the UN’s 2030 Agenda and by the PNRR, Italy’s national plan of recovery and resilience, which has set aside €2 billion to activate 1,288 new dedicated facilities and 600,000 new beds by 2035.

David Finck, CEO, Euryale

“Euryale wants to invest and expand its activity in the healthcare sector in Italy,” said David Finck, CEO, Euryale. “The Italian market needs many new health facilities and beds and this new partnership is a unique opportunity for us to continue our European investment strategy. We strongly believe that combining environmental and social criteria will lead to financial outperformance over the long term.”

Privately-held Kryalos has €10.7 billion AUM, while Euryale has €2.4 billion invested in the healthcare, senior living and nursing home sector in France and other European countries.

Author: Nicol Dynes, Real Asset Insight