Seniors Housing Annual Review 2021
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Seniors Housing
knightfrank.com/research
Annual Review
20212 3
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
FOREWORD THE SURVEY IN NUMBERS
We have been fortunate enough to work with a number of leading operators in the
Housing with Care sector across both private and affordable markets. This analysis gives
us a unique and detailed insight into operations, performance and resident profile.
TOM S CAIFE , HEAD OF SENIORS HOUSING
T he wider backdrop to this
year’s Seniors Housing Annual
Accordingly, the government’s
commitment to “Build Back Better”,
PRIVATE HOUSING WITH CARE
Review has been a challenging one.
We are seeing operators simply has to factor in a need to deliver
Undoubtedly, the ongoing health crisis
exploring what age-appropriate housing to support our
has tested and will continue to test
customers want with aging population.
seniors housing investors, operators
different financing In this report we share the findings
and residents.
options and tenures, with of our third annual Seniors Housing
15,000
As the world begins to open back
an emphasis on choice Operator Survey, our biggest yet,
up, it is encouraging to see just how
and flexibility. based on data shared with us by
resilient the sector has been. leading operators.
50% 65 6,500
units analysed
The data in this year’s Review The results highlight the diverse
O F M AR K E T * S CH EMES U N ITS
suggests that, while the pandemic had sources of income – across different
an impact on the sector, recovery has differences around design, tenants, departments and timescales – with
across 165
been swift. hospitality and services. deferred management fees, rent,
Indeed, it feels like the time has Thanks to (advancements in) modern management and service charges, AFFORDABLE HOUS ING WITH CARE
come in 2021 for the UK seniors medicine, many people in the UK are ground rents, care and wellness, and
Housing with
housing sector, with an alignment of living longer, with the number of people food and beverage all contributing.
forces driving it forward – increasing requiring higher levels of support in later Operating costs, meanwhile, are
investment into operational real estate, life increasing. It is essential to focus dominated by staffing as operators,
expansion of rental, operators gaining
experience, marketing suites re-opening
after lockdowns, greater understanding
on and understand the target customer
and build stable operating businesses.
We are seeing operators exploring what
like in other sectors, are focusing on
staff training and retention as a way of
managing costs.
Care schemes
32%
of the proposition from investors customers want with different financing In addition, we have analysed more
and residents alike and increased
government focus (and spending!) on
options and tenures, with an emphasis on
choice and flexibility.
than 20,000 seniors housing unit sales
across the private sector to give a view O F M AR K E T * *
100 8,500
S CH EMES U N ITS
the social care agenda due, in part, to The potential benefits of a larger on pricing and price changes over time.
the pandemic pushing it up the agenda. seniors housing sector are substantial. As ever, we’d like to extend our thanks
Investors are moving and diversifying Increasing quality of life; addressing to those operators who contributed
across the residential investment feelings of loneliness and isolation; to this report. It has never been more
*Private Housing with Care operators who have delivered 3 or more schemes since 2000
space (PBSA, to PRS and into Seniors reducing social care costs; as well as important to have access to high quality **Affordable Housing with Care operators who have delivered 3 or more schemes since 2000
Housing). Investors view seniors freeing up family housing – all issues data to move the sector forward – the
housing as an extension of the which have come into sharper focus willingness of many of you to contribute
residential investment market with through the pandemic. to our review is testament to this.4 5
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
MARKET UPDATE
imbalance between supply and
2 | Annual delivery of seniors housing units in the UK
demand as shown in Figure 3.
The benefits of a larger seniors ■ Retirement Housing ■ Housing with Care
housing sector to society are
18,000
substantial. Yet, just 20% of local
16,000
authorities in England have supportive
14,000
planning policies or sites allocated to
seniors housing. 12,000
number of units
Progress is being made, albeit slowly. 10,000
A number of recent planning refusals 8,000
have been overturned at appeal based 6,000
on a recognition of ‘need’. This gives
4,000
I nstitutional investment
continued to flow into the
a wider pivot from investors away from
traditional real estate assets.
spend so far in 2021, rising to 56%
over the last 12 months. We anticipate
confidence in the appeals process
for other applications and supports
2,000
0
UK seniors housing market in 2021, Residential operational real estate has international investment will continue the case for planning authorities to
with more than £800 million spent been a key beneficiary of this shift, with to grow as the market matures into a consider robust needs assessments 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
in the first nine months of the year. investors recognising the resilience of liquid, mainstream asset class, in a going forward.
Source: Knight Frank, EAC, planning portals
This represented an increase of 73% ‘beds’ sectors in a time of exceptional similar manner to PRS and PBSA. There are currently 31,000 seniors
on comparable 2020 levels. With a upheaval, as well as the potential for Naturally, as investment has risen, housing units in the pipeline. More
significant pipeline of deals expected long-term secure income. Reflecting so too has delivery. While a significant than 90 seniors housing schemes have
to complete before year-end, we this, residential assets accounted for number of the 749,000 existing gained planning approval already this 3 | Existing seniors housing units per 1,000 people aged 75+
expect annual investment volumes 17% of total UK CRE investment so far in specialist seniors housing units in the year, equating to 4,200 units. In order
150
will reach a record high for the second 2021, up from 12% five years ago and 5% UK are social housing for rent, future for the sector to reach its full potential,
Existing units per 1,000 people aged 75+
successive year. a decade previously. development will be driven by the a uniform and supportive approach to
Rising investment reflects the The upshot for the seniors housing private sector. planning at both a national and a local 140
ongoing strong demand from market has been a more diverse range of We expect the number of specialist level is required.
investors to gain a foothold in a sector investors involved with the sector. seniors housing units in the UK will In this report we share the findings 130
which, at its core, is underpinned by Global capital is also taking note. grow by 9% over the next five years of our third Seniors Housing Operator
solid long-term demographic change. Cross-border investment has accounted to just short of 820,000 units. There Survey, based on information shared
120
Volumes are also being supported by for almost a third of all senior housing is a substantial pipeline for private with us by leading operators. It has,
Housing with Care schemes, offering arguably, never been more important
increased levels of amenities, services to have high quality data to assist with 110
1 | Total investment into Seniors Housing – 2020-H1 2021 and tenures. investment decisions and move the
2001
2002
2003
2004
2005
2006
2007
2008
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Yet, even with this forecast sector forward.
£1.85bn
expansion, the rate of delivery will Source: Knight Frank, ONS, EAC
still be dwarfed by the UK’s aging
population, deepening the existing
Total capital committed to Seniors Housing – 2021
(excluding already spent)
TABLE 1 | UK Seniors Housing Development Forecasts 2021-2025
£1.85bn We expect the number
committed of specialist seniors
RE TIRE M E N T HOUSIN G HOUSIN G WITH CA RE TOTA L SENI ORS H OUSI NG MARKET
housing units in the UK
£1.35bn will grow by 9% over the 2021 668,306 80,696 749,002
£820m next five years to just 2025 (f) 700,956 118,146 819,102
short of 820,000 units.
Forecast new units 32,650 37,450 70,100
Forecast growth (%) 5% 46% 9%
2020 2021 YTD*
Source: Knight Frank, RCA *Total as of mid September 2021 Source: Knight Frank, EAC, planning portals6 7
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
RETIREMENT HOUSING HOUSING WITH CARE
Mature schemes Newer schemes Mature schemes Newer schemes
SECTOR PERFORMANCE In the next five years we expect to see a race to scale and
£457,989
Housing with Care generally achieves higher sales values on
£457,989
Yorkshire &
The Humber
£457,989
£457,989
£457,989
average compared to Retirement Housing,
£457,989
7% | 4%
£457,989
North East East
1% | 1% Midlands
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
6% | 9%
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
North West East of
£457,989
£457,989
£457,989
6% | 8% England
£457,989
13% | 14%
West
Midlands
12% | 11%
Sales performance operator proposition, which includes the Strong house price growth over the last few While this is in line with average
atabase sample: % of salesWales
4 | D examined by region, 2016-2020 As more schemes
2016 2017 3% | 0% 2018 2019 2020 2021 launch, weAverage
are getting
5 years on-site services and support, as well as years relative to the wider property market house price growth for England over
more clarity on how different parts of the access to the communal facilities, which has been one factor driving investment and that time, it should be noted that this is
South West
19% | 17% sector perform, and what drives value can be quite extensive. sales within the seniors housing market. largely due to the exceptionally strong
and out performance. Analysis of sales data for units which Our Seniors Housing Index shows that, performance of the residential property
South East London The data shows two distinct groups; have sold over the last year shows that over the last five years, average prices in market over the last 12 months.
28% | 33% 5% | 4%
RETIREMENT HOUSING HOUSING WITH CARE Retirement Housing and Housing with achieved prices have risen in 2021 Housing with Care schemes have risen by
Retirement Housing Housing with Care
Mature schemes Newer schemes Mature schemes Newer schemes Care. Retirement Housing is age- compared with 2020. more than 20%.
Yorkshire & restricted housing designed with the
The Humber M E T H O D O L O GY
7% | 4%
downsizer in mind, with Housing with
North East Our pricing analysis is based on a sample
1% | 1%
East
Midlands Care schemes providing larger amenities eniors Housing property prices vs. Residential
6 | S
6% | 9%
of almost 500 schemes across the country Indexed 100 = 2006
£457,989
developed since 2000, split between and higher levels of services and care as
£457,989
£457,989
East of Retirement Housing and Housing with Care.
£457,989
North West an integral part of their proposition.
£457,989
England
£457,989
6% | 8% Retirement Housing Housing with Care UKHPI (England and Wales)
£457,989
13% | 14% The schemes comprise more than 10,000
West
individual units, which we tracked from
The sales evidence confirms seniors
Midlands 180
12% | 11% original sales through to today, including housing is capable of securing premiums
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
£457,989
re-sales. This provided us with data for
Wales over local residential pricing. When 160
£457,989
£457,989
3% | 0% more than 20,000 seniors housing property
£457,989
analysing the level of this premium,
£457,989
£457,989
transactions since 2001. This analysis
£457,989
South West 140
19% | 17% includes schemes from all major private careful thought is required, with a
seniors housing operators, which, combined,
number of considerations, such as micro 120
South East London have delivered almost 70% of private units in
28% | 33% 5% | 4% schemes of 20+ units. locations and specification potentially
100
2016
Source: Knight
Retirement Housing
Frank, Land Registry
Housing with Care
2017 2018 2019 2020
having a2021
significant impact. The Housing
Average 5 years
with Care premium is supported by the 80
60
verage price paid per annum for seniors housing units in England
5 | A
40
Achieved price (£)
2020
2008
2006
2009
2007
2010
2018
2014
2016
2015
2019
2013
2012
2017
2011
RETIREMENT HOUSING HOUSING WITH CARE
Mature schemes Newer schemes Mature schemes Newer schemes
Source: Knight Frank, Land Registry
£600,000
£500,000
£573,591
£541,952
7 | Price change 2016-2020
£523,217
£505,109
£499,073
Average price paid
£485,081
£400,000
£462,792
M E T H O D O L O GY
£366,425
£375,108
£300,000
£357,587
The house price index uses hedonic
£359,374
£353,435
£343,848
£353,081
£338,723
£334,068
£333,482
£335,933
£342,787
£326,667
£327,594
£322,625
regression based on price and controlling
£293,350
£291,510
£200,000 for characteristics such as region, property
£252,966
£243,698
£238,907
type and size. The dataset has a bias due
22% 21%
£221,076
to the nature of a sample, with this being
£100,000
(4%) (4%) heavily weighted towards the South East
HOUSING ENGLAND & and South West and to flats. We have
£0 WITH CARE WALES HPI 3% allowed for this weighting within our
(1%) calculations.
2016 2017 2018 2019 2020 2021 Average 5 years RETIREMENT
HOUSING Top percentage figure shows 5-year
Source: Knight Frank, Land Registry growth
Note: Mature schemes are those built before 2010. Newer schemes are those built since 2010.
(Figures in brackets show CAGR (2016-2020)
This represents sales during the 2016-2020 period only. During this period, the data for mature schemes will be resales, with newer stock achieving higher pricing on average.8 9
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
RENTAL PERFORMANCE
An increasing number of seniors BTR years, from more than 5,000 currently
8 | Average price paid by region for seniors housing units in England and Wales schemes have opened in last 12 months, to almost 13,000 by 2025. We project
(2016-YTD 2021)
in addition to an increased provision investment into rental will accelerate as PRIVATE
of mixed tenure offerings (rental units investors from across residential bring HOUSING WITH
alongside for-sale units in the same their learnings from PBSA and PRS. CARE RENTAL
scheme) to meet tenant demand. We have As the number of seniors BTR schemes
We have collected rental data for
Retirement Housing collected rental data for a number of key grow, so too does the availability of a number of key private Housing
Housing with Care private Housing with Care operators as data on aspects such as tenant profiles, with Care operators. This includes
part of this year’s survey. In total, 67% of how tenants are funding their stay, rental units both in BTR schemes
and pepper-popped within for-
ENGLAND AVERAGE private Housing with Care schemes offer acceptable rental levels, design and sale schemes.
£334,340 £460,648 private rental as a tenure option, either operator Opex.
in standalone build to rent schemes, or The rental data confirms that
£PSF
pepper-popped within for-sale schemes. retirement units can support rents than
£459 £502
Some 25% of total investment into
the seniors housing market in the first
are higher than local residential lettings,
which is particularly notable for Housing
67%
of private HwC schemes offer
half of 2021 was specifically targeting with Care. The higher rent being
private rental as tenure option
rental product. supported by the operator proposition
We forecast the number of private including on site services and care, as
rental units to increase by 166% in next 5 well as access to the communal facilities.
2.5%
NORTH WEST NORTH EAST
£244,114 £342,617 £241,564 £296,275
£PSF £PSF Margin from quoting to
£300-£350 £350-£400 £300-£350 £350-£400
verage monthly asking rent
9 | A
achieved rent
WEST MIDLANDS YORKSHIRE AND THE HUMBER
£265,380
£PSF
£445,300 £271,940
£PSF
£364,223
RE TIRE M E N T HOUSIN G HOUSIN G WITH CA RE
0.1%
bad debt reported by
£350-£400 £400-£450 £350-£400 £350-£400
operators
1 BED 2 BED 1 BED 2 BED
SOUTH WEST EAST MIDLANDS London £2,300+ £2,800+ £3,000+ £4,000+
£336,141 £406,031 £239,080 £345,983
North West £1,150-£1,300 £1,300-£1,600 £1,300-£1,500 £2,000-£2,200
verage achieved monthly rents
10 | A
£PSF £PSF
£400-£450 £450-£500 £350-£400 £350-£400
South East £1,600+ £2,300+ £2,700+ £3,200+ 1 bed 2 bed
5,000
South West £1,500-£1,700 £2,000-£2,300 £2,300-£2,500 £2,900-£3,100
SOUTH EAST EAST OF ENGLAND
Average monthly rent £
£381,767 £488,921 £353,171 £373,248 4,000
West Midlands £1,400-£1,500 £1,800-£2,100 £1,600-£1,800 £2,200-£2,400
£PSF £PSF 3,000
£500-£550 £500-£550 £450-£500 £450-£500 Yorkshire and
£1,450-£1,700 £1,700-£1,900
the Humber
2,000
East of England £1,850-£2,000 £2,600-£2,800 £2,500-£2,700 £3,300-£3,700
1,000
LONDON
North East £900-£1,100 £1,250-£1,400
£495,883 £1,029,708 0
Mature
schemes*
New build
schemes**
Average
£PSF East Midlands £1,500-£1,800 £1,900-£1,100 £2,000-£2,200 £2,500-£2,700
£650+ £750+
AVE RAGE
Source: Knight Frank, Land Registry
* Achieved £psf in London ranges from £600 to in excess of £1,500 psf.
ASKI N G RE N T £1,900 £2,450 £2,500 £3,050 Knight Frank Operator Survey
*Analysis includes schemes that are have been
Source: Rightmove, operator websites operating for 3+ years (built before 2017). **Analysis
includes schemes that have been built since 201710 11
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
SALES RATES AND
MARKETING A number of operators have reported a significant uptick in
new enquiries and reservations in recent months.
A number of operators have reported a
significant uptick in new enquiries and
reservations in recent months. While OCCUPANCY RATES – PRIVATE HOUSING
PRIVATE HOUSING WITH CARE – SALES AND MARKETING
our analysis of quarterly sales data WITH CARE LEASEHOLD UNITS
points to a 141% uptick in volumes in Q3
2021 compared with the second quarter.
The pandemic has forced the
reassessment of housing and care
provision in later life and accelerated SALES AND MARKETING PROCESS SNAPSHOT
the decision making process. With the
further delivery of new institutional
quality Housing with Care, there is an
increased awareness of seniors housing
90% 81%
and the benefits of its proposition. The Average occupancy Average occupancy –
ability for seniors to visit the sales room – Mature schemes* all schemes**
and show apartments once again, and
for operators to engage face to face, has
helped to increase sales activity. This
momentum will continue, as there is
2.5
Average number of
15
Average number of
15
Average number of
76%
% of schemes which
a wider understanding of the product, on-site sales staff (FTE) months before PC that a months before PC that had a show apartment
at PC** price list was released the sales office opened present before PC*
and rental continues to expand.
Housing with Care has stood up well Knight Frank Operator Survey
to Covid-19 and the data indicates sales *Schemes built before 2018. ** All schemes within Operator Survey
are already recovering from this period. Source: Knight Frank Operator Survey *Mature villages **PC - Practical Completion
11 | Downsizing Premium
Average Seniors Housing unit price vs. average local residential house price**
SALES RATES - NEW BUILD VILLAGES
Average % of units exchanged off-plan* in schemes built since 2018
England average 80% Housing with care
East Midlands 77%
STOCK SALES RATE - % UNITS SOLD AFTER PC
On average, 25% of units
East of England 77%
London 76%
85% were exchanged off-plan,
North West 85%
South East 78%
with some developments 25% 44% 63% 78%
South West 83% achieving 50% off-plan.
79%
Wales 82%
West Midlands 77%
Yorkshire and The Humber 86% Retirement Housing
PRE PC 6 MONTHS 12 MONTHS 18 MONTHS
Knight Frank Operator Survey *Off-plan indicates exchanges which took place before practical completion. PC – practical completion
Source: Knight Frank, Land Registry ** Local residential house price is the average price of a house owned by seniors within the postcode district of each Seniors Housing scheme. Note: These are averages based off proportion of units exchanged before PC and the rates do vary across schemes.12 13
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
RESIDENTS AND OCCUPANCY
AV E RAGE RE S I DE N T AGE DISTRIBUTION ( S CHEM E AVERAGE) AVERAG E RESID EN T AG E
% O F R E S I D E N T S M OV E D W I T H I N 1 0 M I L E S D I STA N C E T RAV E L L E D TO P R I VAT E H O U S I N G W I T H CA RE S CHEM ES BY ENTRY AGE
% of 75-79 % of 80-84
19% 45%
84
PR IVATE Hw C A FFORDA BLE Hw C Hw C AV E RAG E
Under 65 0% 2% 1%
YEARS
P R I VAT E H w C
75 min | 92 max
85% 5 MILES
78
YEARS
A F F O R DA BL E
H wC
57 min | 86 max
A FF ORDA BLE
36% 52%
HwC
65-69 0% 2% 1% 80
YEARS
H wC AV E R AG E
57 min | 92 max
10 MILES
70-74 0%
13%
8%
51%
86 YEARS
84 YEARS
D I STA N C E T RAV E L L E D TO P R I VAT E H O U S I N G W I T H CA RE S CHEM ES % of residents
PRIVATE HwC
80 YEARS
80 YEARS
77.5 YEARS S
43% 25%
74 YEARS
75-79
18% 45% 34%
63%
Hw C AVE RAGE 10 MILES 5 MILES
This analysis is based on average entry age by scheme and applied to average distance travelled
PR I VAT E H O U SI NG W IT H CAR E AG ES BY T EN URE
80-84
50% 37% 42%
% O F P R I VAT E H w C R E S I D E N T S W H O W E R E OW N E R O C CUP I ERS
97%
AV E RAG E L E N GT H O F STAY (MAT U R E V I L L AG E S *)
85-89 1% 11%
AV E RAG E E N T RY AG E
27%
Private HwC average
Private for-sale HwC
Private rental HwC
Affordable HwC
HwC average
Private HwC
90+ 5% 0% 2%
Private HwC
Affordable HwC
% O F S CHE ME O C CU PIED BY C OUPL ES (HwC) % OF SCHEME OCCUPIED BY COUPLES – BY AVERAGE AGE
P R IVAT E AF F OR DAB L E H wC
HwC HwC AVE RAG E
Under 65
65-69
18%
9%
18%
9% 7.2 5.1 % OF RESIDENTS WHO REQUIRED
70-74 3% 3% Y E A RS Y E A RS P E R S O NA L CA R E O N E N T RY
75-79 52% 14% 27%
80-84 41% 18% 31%
15%
16% 77% 53%
85-89 21% 21%
32% 45% 26% 90+ 9% 9%
Private for-sale Private rental Affordable Average Grand Total 36% 15% 26%
*Analysis includes villages that are have been operating for 3+ years P R I VAT E H w C A F F O R DA BL E H wC H w C AV ER AGE
This analysis is based on average entry age by scheme and applied to average household composition14 15
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
OPERATIONS
14 | Average % of total costs by source
Private Housing with Care Schemes, including staffing costs
Estate Management & Maintenance Care & Wellness Food & Beverage Estate Agency Other
Seniors housing is operational real estate with experienced 2% Costs
3%
teams managing a range of income streams across both DMF, 7% 8%
Costs in Housing with Care schemes
rental and mixed tenure platforms 64%
vary and are influenced by amenities,
19% 15% service and care levels, location and
scale. Staffing is by far the largest
SCHEMES WITH SCHEMES WITH
THIRD PARTY OPERATOR
CARE DELIVERED CARE
outlay for operators, though costs
48% associated with care and wellness are
8%
also significant, especially for schemes
28% with operator-delivered care.
Estate management and
maintenance costs are also notable.
Source: Knight Frank Operator Survey
The data provided in the Income and In line with last year, service or newer built schemes, so this metric will
Costs section refers to private Housing management charges account for 60% vary substantially.
with Care schemes included with the of the total, on average, though such The remaining 20% made up from food
Knight Frank Operator Survey. This charges can vary significantly at each and beverage (F&B) facilities – including Staffing there are more staff per unit in schemes
data is for the 2020/21 financial period. scheme depending on the level of restaurants and cafes – care and wellness, with operator delivered care.
As a proportion of income, staff costs
amenity and service offered. ground rents and estate agency. Within private schemes, the majority
Income represent 35% of revenue across the
Deferred Management Fees Compared to last year’s survey, income of staff are employed in areas such Staff costs represent
Income from Housing with Care schemes surveyed, rising to 48% in schemes
(DMF) makes up the second largest from ground rents makes up a smaller as F&B, estate management and 35% of revenue across
schemes comes from a diverse number with care provided by the operator.
income stream with an average of 21% proportion of the total, reflecting the fact maintenance. Conversely, in affordable schemes surveyed
of sources, and income streams There is approximately one full-time
of total gross revenue. Note that this that most operators have, or are in the schemes, the focus for staffing is within
vary across different operators, staff member to every five units within a
analysis combines both mature and process of, phasing them out. care and wellness.
propositions and age of schemes. private Housing with Care scheme, though
13 | Average % of total gross income by source TE Staffing (# units per
15 | F 16 | FTE Staffing Distribution (%)
Private Housing with Care Schemes, excluding rental income 1 FTE, staff costs as % of % of FTE Staff by Area, private and affordable Housing with Care schemes
revenue) Private Schemes
Service/ Management Charge Ground Rent DMF Care and wellness F&B Estate Agency Other Private Affordable
Staff Costs as % of Revenue
# Units per 1 FTE
100% 0.4% 0.8% 0.5% 0.7%
5.8% 6.1% 60% 7.0 22%
90% Estate Management
3.5% 6.4 & Maintenance 44%
12.8% 50%
6.0
80%
21.8% 5.1 48% 5.0 15%
70% 40% Care & Wellness
19.5%
2.1% 51%
60% 4.0
1.5% 30% 35%
3.7
50% 3.0 39%
29%
Food & Beverage
20% 3%
40% 2.0
30% 65.2% 59.0% 10% 1.0 10%
Estate Agency
20%
0% 0.0
All Schemes
Schemes with
3rd Party Care
Provided by
Operator Schemes
with Care
10%
14%
Other
0% 2%
SCHEMES WITH THIRD PARTY CARE SCHEMES WITH OPERATOR DELIVERED CARE 0% 10% 20% 30% 40% 50% 60%
Source: Knight Frank Operator Survey
Source: Knight Frank Operator Survey Source: Knight Frank Operator Survey Note: Estate Agency costs not provided for Affordable Housing with Care schemes.16 17
S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1 S E N I O R S H O U S I N G A N N UA L R E V I E W 2 0 2 1
CARE AND WELLNESS IN HOUSING WITH CARE SCHEMES
17 | Average % of staffing costs by source
Private and Affordable Housing with Care Schemes
Private HwC Affordable HwC
Schemes with third party care Schemes with care provided by operator Affordable Housing with Care Schemes
21% 8% 90%
Estate Management
& Maintenance 55% 38% 45%
of residents in private schemes of private schemes offer of private schemes and 99% of
Care & Wellness 16% 39% 53% and 50% of residents in nursing care within the affordable schemes surveyed
affordable schemes require scheme provide emergency support
domiciliary care within the scheme
Food & Beverage 18% 14% 2%
Estate Agency 8% 4% n/a
22% 39% 70%
Other 2% 5% n/a
Source: Knight Frank Operator Survey of private schemes provide of private schemes of private schemes have
care in the local community, surveyed give public access at least 1 FTE wellness
increasing to 54% for schemes to gym/wellness facilities staff member
with operator delivered care
28%
DEFERRED MANAGEMENT FEES
In private housing with care schemes
93% of the schemes from the operators surveyed collect a DMF/event fee. Of those of schemes surveyed had a
operators which do collect DMF/event fee, more than two thirds (69%) offer just one maximum DMF cap of 20%+
option, while the remaining third (31%) offer two options.
18 | Maximum DMF fees at schemes Year on year comparison D M F/E V E N T F E E S 11 14,800 31,000 15
DMF Ranges: % shown on chart are the proportion of schemes with each DMF range
Deferred Management Fees (DMF), average of 11 different hours of domiciliary care hours of domiciliary care hours of domiciliary care
0-5% 5-10% 10-15% 15%+
or event fees, are typically paid activities offered within provided on average provided on average provided on average per
when the long leasehold is re-sold private schemes, with 12 annually within private annually within affordable week per resident
and are used to help offset upfront classes run per week schemes sampled schemes sampled
7% 4%
costs and align the interests of the
11%
operator and the resident.
33%
21% 35% DMF structures vary between
operators, but our survey suggests
that maximum caps are getting
450,000
larger. Some 51% of operators who
responded to our survey had a
maximum DMF fee of between 10% Total hours of domiciliary care provided to
51% and 15%, up from 38% last year. residents across private Housing with Care
38% 28% of schemes surveyed had a schemes sampled by Knight Frank over the last
maximum cap of 20%+. 12 months*.
2 0 1 9 / 20 2 02 0/2 1
HOURS
Source: Knight Frank Operator Survey
Source: Knight Frank Operator Survey, UKHCA *In the 31 schemes which provided at least one hour of care over the 12 month periodKnight Frank Senior Housing Senior Housing Lauren Harwood
Associate – Seniors Housing
The Knight Frank Senior Housing Team Tom Scaife
+44 20 7268 2599
provides a full range of services to the Head of Senior Housing
lauren.harwood@knightfrank.com
sector from research and consultancy, +44 20 7861 5429
valuations and capital markets aimed tom.scaife@knightfrank.com Research
at senior living developers, funders and
Peter Youngs Oliver Knight
operators and specialising in senior housing,
Partner – Seniors Housing Head of Res Dev Research
housing with care, retirement living, and
+44 20 7861 1656 +44 20 7861 5134
assisted living schemes.
peter.youngs@knightfrank.com oliver.knight@knightfrank.com
Special thanks to the operators who Cormac Henehan
contributed to this report. Senior Analyst
+44 20 3967 7140
cormac.henehan@knightfrank.com
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