Spain targets European retirees | Economy and business
In the Spanish municipality of L’AlfÃ s del Pi, where almost half of the 20,500 inhabitants come from overseas, there is not a single person who has not heard of the Forum Mare Nostrum. It is a residence for the elderly that has been operating in the province of Alicante, in the region of Valencia, for 20 years. Most of the residents of Forum Mare Nostrum are from other countries, including Germany, the Netherlands, Belgium and Switzerland, with an average age of 75.
The retirement village is hard to miss – it covers 62,000 square meters, has 229 apartments and a central building that provides social, health and cultural services to residents. To live in Forum Mare Nostrum, residents must pay an advance of between â¬ 100,000 and â¬ 230,000 and pay a monthly rent, which ranges from â¬ 350 to â¬ 950.
Last July, the owner of the complex, Grupo Goya, sold the property to Care Property Invest, a Belgian real estate company specializing in senior housing, which arrived in Spain in 2020. The sale price was 35 million euros. The retirement village is still managed by Grupo Goya, which now offers rental contracts for periods of 20 years.
This is the first time that an international fund of this type has purchased a retirement home on the Spanish Mediterranean coast. And it’s unlikely to be the last. Vanesa Laport, director of sales for Grupo Goya, said the company was in “negotiations with several international funds as part of its five-year growth strategy, both from a resort property perspective and as a manager of these “. The group’s plan is to bring more senior resorts to the market, both in coastal areas and in towns. Indeed, four other complexes are planned or already underway in the province of Alicante and Palma de Mallorca, in the Spanish Balearic Islands. Together, with Forum Mare Nostrum, which it continues to manage, these properties represent 1,255 homes.
In Spain, people prefer to buy property and leave it to their children
Juliette Bleekemolen, from Credo EspaÃ±a
The sale of Forum Mare Nostrum is a sign of the weak but growing demand for retirement villages on the Mediterranean coast. “We have detected an interest among European and North American investment funds specializing in the life of seniors in mature markets such as Germany, Belgium, France and the United States”, explains Nuria BÃ©jar, Director National Seniors Health and Living at Savills Aguirre Newman, a real estate agent who advised on the sale. According to BÃ©jar, this interest is not only in residences by the sea, but rather in all forms of housing available for independent seniors in Spain.
During the real estate boom of 2000-2008, Spain also tried to become the Florida of Europe and attract healthy international retirees with high purchasing power. Many of these projects either failed or were turned into other types of housing such as apartment buildings and hotels. But the few who remain standing, decades later, have become benchmarks for this niche market that is steadily gaining ground. This is the case of Ciudad Patricia, a seaside resort in Benidorm in the province of Alicante, which has existed for 35 years. In 2005, the complex was bought by Credo EspaÃ±a, a real estate group that is part of the Dutch construction multinational VolkerWessels.
Set on a plot of 100,000 square meters, Ciudad Patricia comprises five buildings and a central building with a restaurant, bar, library, salon and beauty salon. A retirement home is also on the property, although it is not owned by Credo EspaÃ±a. âWe are seeing increased interest from investments. They are looking for complexes that are already operational, which they know will work, âexplains Juliette Bleekemolen of Credo.
Ciudad Patricia properties are operated on a lifetime use regime, which means residents do not own their homes. For a 78-year-old man to live in the complex, the average cost is around â¬ 170,000. Most residents are from the UK and the Netherlands, while the average age is 79 for men and 77 for women. Of its 177 apartments, 155 are occupied and 22 are still available.
The Dutch company is also planning to build another retirement home in Sant Pere de Ribes, near Sitges in the province of Barcelona, ââwhich is scheduled to start in 2023. This site will offer different types of housing: 209 apartments , 12 chalets, a retirement home. and a rehabilitation hotel, as well as restaurants and bars to help integrate the community.
These properties are more like a hotel than a home as they offer medical assistance and lots of social activities. They tend to be located on the outskirts of large cities, in rural areas, or on the coast, as they require large tracts of land. Most of the interest comes from retirees in the UK, Germany, the Netherlands and the Scandinavian countries, who seek sunny weather, good health services and a lower cost of living. To settle in these retirement communities, most sell either their home in their home country or their property in Spain, given that the vast majority have lived in Spain for some time, Laporta explains.
The retirement home market in Spain, although not large, is growing. But experts warn it still faces challenges. âI have no doubt that the senior resort model will work in the next few years, but at the moment there are no operators; we need a foreign operator or investor with successful cases to come to Spain and replicate the model, âsaid Alberto DÃ¡iz, managing director of capital markets at real estate company Colliers.
Aitor PÃ©rez, from senior residential consulting firm Gerokon, is not so optimistic: âThe main limitations are in their use, as these are often rotating properties, and the fact that you cannot buy these apartments.
In addition, there has so far been little demand from Spanish retirees. âIn Spain, people prefer to buy property and leave it to their children – who look after their parents – to inherit it. Although that is changing, âsays Bleekemolen.
The senior citizen complex is only one option for independent living for senior citizens. There are also cohousings, colivings and apartments with special services. âAt present, there are more than 20 projects aimed at independent seniors in Spain,â explains BÃ©jar.
Indeed, sources from Savills Aguirre Newman estimate that “2021 will end with approximately 235 million euros of investments and projects with committed investments”.