Healthcare housing combines impact and stable returns

The Dutch housing market is under pressure. But the main challenge is not only about numbers. Underlying demand is changing and differs by segment.

Senior housing: more dynamic than ever
Growth is particularly evident in households of older people, especially those aged 75 and over. By 2040, more than a third of all households will consist of people aged 65+, with particularly strong growth in the 75+ group. At the same time, the number of single elderly households is increasing rapidly, with this growth concentrated mainly in urban areas.

Limited delivery
This demographic trend requires a different type of housing: single-level, accessible homes, located near amenities and suitable for future care needs. However, the current housing stock is not yet sufficiently aligned with this demand. More supply is needed.

The development of senior housing is significantly lagging behind targets. While hundreds of thousands of additional life-course-proof homes will be required by 2030, annual additions remain limited. In 2024, only around 4,000 such homes were built.

From shortage to impact
It is precisely within this structural imbalance between supply and demand that Dutch institutional investors can make an impact. New healthcare housing enables seniors, often the beneficiaries of institutional investors, to move into homes that better match their stage of life and future care needs.

This effect goes beyond the individual resident. When a senior moves, a regular home becomes available for a family or first-time buyer. A single investment can therefore trigger a chain of moves and improve mobility in the housing market.

We see this, for example, in the first acquisition for our senior living impact fund, which focuses on institutional investors. This concerns the new-build project De Grote Lijster, a care residential complex with 42 apartments for seniors with intensive care needs, including dementia. The complex is being developed to high sustainability standards and is leased long-term to care operator Kloek Wonen met Zorg. This type of development adds targeted supply for a group for whom suitable housing is scarce, while simultaneously enabling moves from regular (care) homes.

Stable in a period of rising interest rates
Recent years have been characterised by rapidly rising interest rates and a broad repricing of real estate. In many segments, this resulted in clear yield shifts and downward pressure on values.

Healthcare-related segments show a different pattern. Initial yields in private and intramural care have remained relatively stable, despite the increase in 10-year interest rates. This indicates limited sensitivity to interest rate movements and strong underlying demand.

This stability is no coincidence. Demand for healthcare housing is primarily driven by demographics and less by economic cycles. Residents do not postpone their housing needs in response to higher interest rates, while operators work with long-term contracts and predictable cash flows.

For institutional investors, this has fundamental implications. In an environment of geopolitical tensions and macroeconomic uncertainty, healthcare real estate offers a relatively stable component within a portfolio. At the same time, it is a segment where financial performance and societal impact come together, precisely because the underlying demand is clear and structural.