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CORONAVIRUS UPDATE

See the latest Coronavirus statistics from across the world on our world map SEE MAP UK Confirmed cases: 285,787 | UK Deaths: 44,216 SEE MAP Italy Confirmed cases: 241,184 | Italy Deaths: 34,833 | Italy Recovered: 191,467 SEE MAP Spain Confirmed cases: 250,545 | Spain Deaths: 28,385 | Spain Recovered: 150,376 SEE MAP See the latest Coronavirus statistics from across the world on our world map SEE MAP UK Confirmed cases: 285,787 | UK Deaths: 44,216 SEE MAP Italy Confirmed cases: 241,184 | Italy Deaths: 34,833 | Italy Recovered: 191,467 SEE MAP Spain Confirmed cases: 250,545 | Spain Deaths: 28,385 | Spain Recovered: 150,376 SEE MAP

TODAY'S OTHER NEWS

Government urged to encourage investment in senior living sector

A leading private wealth firm has called on the government to take urgent action to help encourage investment into much-needed senior living facilities following the Covid-19 outbreak.

Boodle Hatfield says the coronavirus crisis has highlighted the need for an increased supply of lower-density housing for those aged 65 and above. High density British care homes have been at the centre of some of the worst outbreaks of Covid-19, with pensioners being the highest risk demographic.

Senior living developments are widespread in the US and Japan, and growing in popularity in parts of Europe such as France, but remain very niche in the UK.

Figures suggest that the market in the US is ten times the size of the one in the UK, while only 4.8% of over-80s in the UK reside in senior living accommodation.

Boodle Hatfield highlights that senior living developments offer high-specification private apartments geared towards those aged 65 and above.

While residents of these developments may need access to some on-site care support services flexibly over time, they are typically independent.

In addition to spacious private living quarters, developments feature communal areas in which residents can socialise ‘with the opportunity of expert talks, art classes and cocktail parties’.

Typically, developments also have facilities such as gyms and swimming pools, private dining rooms to host larger groups of friends and family, and concierge services. Some even offer services from chauffeurs, beauticians and technology assistants.

Adam Chamberlain, real estate finance partner at Boodle Hatfield, believes the government should take the following steps:

Include senior living in the National Infrastructure Strategy

Inclusion of senior living within the National Infrastructure Strategy would open the sector up to much greater levels of public funding than is available under the NHS and Social Care budget, under which it would otherwise logically fall. The National Infrastructure Strategy is projected to include public spending of up to £100 billion (in just the first five years of a 30-year plan) on key infrastructure and transformational change projects.

With the Bank of England recently issuing negative yield gilts for the first time, the government would be in a position to borrow to fund expansion of the sector at very little cost. Inclusion in this major national programme would also help encourage more private capital to join in funding senior living projects, which would further aid job creation in the construction sector.

Offer guarantees on loans to fund senior living developments

The government could also consider offering guarantees on loans used to fund development of senior living facilities. By offering a level of guarantee, the government would eliminate some of the risk which would encourage greater lending from banks and other funders.

Adjust REIT rules for Senior Living facilities 

The tax-efficient nature of Real Estate Investment Trusts (REIT) makes them an attractive vehicle for investors. REIT rules could be adjusted to have a special time-limited exemption to allow development projects of senior living facilities to be held in REITs (as opposed to just the finished facility).

This would encourage more money into the sector at a point in the economic cycle when investors might be more risk-averse and less willing to fund property development.

“The care homes crisis has highlighted the urgency of securing funding for lower density senior living developments, that afford more protection if there are future coronavirus outbreaks,” Chamberlain argued.

“We would expect that once the government has laid the groundwork to stimulate investment, the senior living model should take off, delivering returns for both private sector investors and the taxpayer.”

He said that greater availability of senior living housing would allow older people to enjoy decades of independent, fulfilled lives, complying with social distancing and shielding guidelines ‘but with support from medical professionals and carers easily at hand’.

“Regardless of COVID-19, the UK’s demographics suggests that more investment needs to be made in quality, attractive accommodation for older people outside of the care home model,” he added.

Chamberlain says that once the senior living accommodation sector reaches a critical mass and its economic viability is clearly established, government ‘subsidies’ or other support could be withdrawn.

“Once this sector is properly established we would expect it to go through the rapid growth of other property subsectors such as ‘Build to Rent’ which is now attracting large amounts of investment from institutional funds.”

He concluded: “The pandemic is likely to have an enduring impact on how people live their lives. Luxuries such as international travel and restaurant outings may no longer be as desirable as they once were. People may instead choose to prioritise spending their money on safe and comfortable accommodation that affords them a sense of community in their later years.”

Retirement lifestyle developer invests in Scotland

Scotland is one place that appears ripe for the introduction of a thriving senior living marketplace, with developer AB Living recently promising a ‘reinventing of retirement’ in various locations in the country.

While Scotland’s provision of retirement properties took a hit when McCarthy & Stone (the UK’s biggest operator of retirement developments) sold its portfolio to exit the country in a cost-cutting move last month, AB Living - which has developed an award-winning retirement community near Carlisle, 15 miles over the border - is keen to invest in Scotland. It’s also eager to provide a type of retirement living never seen before in the country.

Scalesceugh Hall & Villas has been popular with Scottish retirees for this very reason, giving husband and wife team Bruno and Dr Anita Herdeiro the encouragement to expand north.

Government urged to encourage investment in senior living sector

There are 13 Scandinavian-style villas and bungalows at Scalesceugh, with apartments being provided in the Edwardian hall, and a spa and wellness centre also due to open this year.

The emphasis is on lifestyle, rather than care, which the duo believe makes their developments unique in Scotland. Bruno Herdeiro, an experienced global strategist who previously helped negotiate the £12.5 billion takeover by BT of mobile phone company EE, is co-director of AB Living.

“Scotland has some of the most beautiful locations in the world and fits perfectly with our vision of creating amazing spaces, in amazing locations, with amazing services,” he said.

“One of the key challenges that some of the leading PLCs have been facing is their ability to adapt to, and manage, a market that is 500 miles away from their headquarters, and in some respects very different to England and requiring different approaches.”

“We have been contacted a number of times, by different entities, encouraging us to expand to the country. Given our close proximity to Scotland, we are uniquely placed to serve the Scottish market.”

He said a significant percentage of AB Living’s current customer base has come from Scotland - and decided to move given the lack of options available north of the border.

“We have therefore made a number of appointments to build our land, marketing, sales and legal capabilities in Scotland, and are now in the process of identifying a team of architects, engineers and planning consultants to support our journey in the Scottish market,” he said.

“We are ready to take our business to the next level and are excited about the prospect of helping to reinvent retirement in Scotland.”

Government urged to encourage investment in senior living sector

Co-director Dr Anita Herdeiro has continued working as a GP to advise patients and fellow professionals on the frontline through the Covid-19 pandemic. She is used to dealing with major challenges. In 2004 she was working for the Red Cross in Sri Lanka, when the devastating tsunami struck just a few days after she arrived. Additionally, she once worked for Mother Teresa in Calcutta.

“Our unique selling point is lifestyle retirement living. Existing retirement villages in Scotland put their emphasis on care,” she said.

“We don’t look at retirement as a developer, we look at it from the point of view of providing a community.”

She added: “We have seen during this lockdown how important community can be. We have supported homeowners at Scalesceugh and they have been able to safely exercise in acres of beautiful gardens. In usual times, we would be providing a cafe as a meeting place, and wellness facilities. There is nothing in Scotland like this.”

She said the villas themselves are carefully designed with wellness in mind, with the large windows specially imported from Denmark to allow more natural light to flood in.

“The homes have high specifications and up-to-date eco living features,” she concluded.

Anita and Bruno travelled widely together, including to the USA, Australia and Scandinavia, gathering inspiration for their Scalesceugh Hall & Villas development. The homes are available for people aged 55 and over. You can see them here.

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