Is the seniors housing market finally sexy?

Editor’s Note: RENX is pleased to welcome Imran Jiwa to our group of expert contributors. Imran is a board member of the Ontario Retirement Communities Association and vice president of asset management at Lux Equity, which focuses on the retirement home industry. Imran will contribute regular columns on issues relating to the seniors housing sector.

Seniors Housing Columnist Imran Jiwa of Lux Equity.As baby boomers hurtle into retirement, Canada faces one of the largest demographic waves in history.

Statistics Canada predicts the senior population aged 75 and over will grow by 53 per cent between now and 2034. In fact, by 2030, there will be 3.7 million Canadians who will need to relocate to a retirement community.

Life expectancy in Canada is also one of the highest in the world and continues to increase as science and technology advancements come to fruition.  

About the market:

Many people are unaware of the seniors housing market unless they are investors or looking to put their parents into a retirement home.

To summarize, 20 per cent of all the retirement communities in Canada are owned by a small group of major players — Chartwell Retirement Residences, Revera, Reseau Selection, Cogir, Le Group Maurice and BayBridge Senior Living.  The other 80 per cent are owned by small, independent firms.

This allows for consolidation in the marketplace by larger institutions. 

Spectrum of care

Seniors housing is also divided into different spectrums of care: seniors apartments, independent living, assisted living, memory care, and long-term care facilities (also known as complex care). 

Seniors Apartments/Independent Living: This spectrum of care is becoming increasingly popular in Ontario, where it allows operators and owners to capture a younger target market (~70 years old). Most seniors apartments/independent living communities offer three meals per day, weekly housekeeping and a 24-hour concierge staffed by a non-healthcare professional.

Recent trends show seniors flock to these types of communities when they can no longer prepare meals on their own, want the peace of mind that in case of an emergency they can push an emergency pendant and help will be on the way, or when they are becoming lonely living by themselves and want to build new relationships.

Assisted Living: These types of communities in Ontario are privately funded by the residents and offer various services to meet the needs of the seniors. The average age for a resident in this type of community is 75 years and older.

Typical services in these types of communities include three meals daily, daily or weekly housekeeping, personalized healthcare delivered by nurses and other healthcare professionals, and daily activities programs.

Memory Care: In Ontario, there is currently a large demand for memory care-focused communities for residents with dementia and Alzheimer’s.

Some assisted-living communities in Ontario offer a separate secure floor dedicated to this type of care and allow for the resident to be accommodated in the same facility (aging in place). Furthermore, these types of communities are privately funded by the residents.

Long-term Care: Residents in long-term care communities usually have very complex care requirements and are partially funded by the Province of Ontario. 

Currently, there is a long wait list for residents looking to reside in long-term communities, and most new residents are transferred from local hospitals.

Q: Despite strong demographic trends, will the market be ready for the boom? 

A: Demand growth by new residents entering retirement communities was strong last year, showing an increase of three per cent. However, this was lagged by a low supply growth of just 1.1 per cent, which led to a significant supply shortage. This could be a sign for more opportunities in the sector.

Recent seniors housing portfolio transactions

There is a lot of new capital entering the industry where larger institutions are acquiring portfolios of retirement homes, often attracted by the high yields generated by the asset class.

This is often the case when investors benchmark retirement home investment returns to other asset classes such as equities, and other real estate assets such as office buildings or apartments.

With a growing demographic backing the sector, it is clear there is a significant need for more seniors residences throughout Canada. At this rate, thousands of new beds will need to be developed in order to meet demand in the coming decades. 

Imran is a passionate leader in the seniors housing industry. He is the Vice President of Asset Management at Lux Equity, a Private Equity firm headquartered in Toronto focusing on…

Read more

Imran is a passionate leader in the seniors housing industry. He is the Vice President of Asset Management at Lux Equity, a Private Equity firm headquartered in Toronto focusing on…

Read more

Industry Events