24 June 2020
Care homes have been in the eye of the coronavirus storm which has engulfed Europe in recent months, but those that were quick to take measures following the outbreak of the pandemic have been left nearly unscathed, according to Erwin Drenth, director of healthcare investment at Dutch real estate investment manager Bouwinvest, in an interview with pan-European real estate publication PropertyEU.
Entitled “Care homes face multiple challenges”, the article explored the impact of the pandemic on the sector and discovered that some have managed better than others. The need to act promptly is one of the key lessons that Bouwinvest has learned from the crisis, Drenth said. “Those facilities which at the very first signs of infection took unpopular measures by shutting down for visitors and applying infection-control procedures such as disinfection and personal protective equipment, reported very few cases.”
Bouwinvest owns a €300 mln care home portfolio in the Netherlands and saw a slight drop in occupancy levels of between 3% to 7%, Drenth added. While the pandemic has resulted in higher operational costs due to increased expenses for personnel, equipment, disinfection and medical supplies, Drenth said there have been mitigating factors. “Of course margins are more compressed and the financial situation is worse than before. But operators are also receiving more government funding.”
Structural demand due to greying population
In a recent report on the impact of the Covid-19 pandemic, Bouwinvest’s research department concluded that care homes would be hit less hard than some other segments of the real estate market due to government intervention. Bouwinvest expects structural demand for care homes to remain strong in the coming years due to the greying of the population and believes a radical shift in the sector’s fundamental drivers is therefore unlikely.
Read here how other care home investors across Europe are faring the wake of the Covid-19 pandemic.