‘The main trend can be summarised relatively briefly: there is still little construction activity – too little!’ says Markus Bienentreu, Managing Director of Terranus. "This is because demand for modern and well-designed facilities remains high. Added to this is the need for replacement buildings for facilities that are at the end of their life cycle. The problem is that new construction is often not profitable."
Investment costs generally not sufficient
Although financing conditions have improved somewhat due to lower interest rates, this is not enough to reverse the trend. The sticking point remains the refinancing of investment costs, with significant differences between the federal states: ‘In Baden-Württemberg and North Rhine-Westphalia, refinancing has been adjusted to such an extent that new construction projects can be economically viable. This is not the case in all other federal states. As a result, new buildings are currently only being realised by operators under the ownership model or by developers. With sales under partial ownership, it is still possible to achieve adequate purchase prices,’ says the expert, who has been advising investors and operators of care properties for over 25 years.
Assisted living attractive for operators and investors
When new buildings are constructed, the trend continues to be towards combination models of (partially) residential care and assisted living. The integration of outpatient care is also often attractive because it allows operators to extend their value chain even further. The size of the facility depends on the location and the possibilities offered by building regulations. For a residential facility, 80 to 120 places is generally a sensible size – supplemented by at least 20 to 30 units for assisted living. Bienentreu: "In any case, it makes sense to separate full residential care and assisted living in terms of building design. On the one hand, this meets the wishes and needs of the residents. On the other hand, the apartments can also be used for other purposes if necessary."
Digital building equipment and energy efficiency
Modern technical building equipment is essential. The property must be compatible with advancing digitalisation. This starts with the necessary infrastructure for fast internet: electronic documentation, including from mobile tablets or smartphones, is increasingly becoming standard in the care process. Fast internet for residents is also standard. ‘Above all, however, expansion reserves must be planned for technical assistance and support systems, without which we will not be able to cope in the future. Even though much of this works wirelessly, sufficient connections and line capacities must be planned for. This is because retrofitting is usually complex and expensive,’ advises Markus Bienentreu.
In a care property that is used 24/7 by residents and staff, energy consumption is high. This means that new buildings are constructed with an insulated building envelope in accordance with the latest standards – in conjunction with an efficient heating system. ‘In many cases, it can also make sense to plan for a PV or solar thermal system,’ concludes Bienentreu.
When it comes to new construction, the trend continues to be towards combination models of (partially) stationary care and assisted living, according to Markus Bienentreu, managing director of Terranus.