Pension Insurance Corporation plc (PIC) and Octopus Real Estate have formed a joint venture, Senior Living Investment Partners, to invest in the UK retirement living sector.
Aiming to deliver £1bn in gross development value, the joint venture’s primary objective is the development of a portfolio of new, high-quality, retirement communities nationwide against a backdrop of undersupply and increasing demand, driven by a growing ageing population.
PIC will invest up to £200m in equity to fund the development and operation of around 10 new retirement communities across the UK.
This is the first investment into the emerging UK retirement living sector for PIC.
The retirement communities developed through the joint venture are expected to provide homes for around 2,000 older residents and will include lifestyle and wellness facilities such as restaurants, gyms, spas, pools and resident communal spaces.
This is Octopus Real Estate’s second retirement investment strategy; the first having invested the equity in over £700 million of retirement communities’ Gross Development Value, or the projected value of a completed development, alongside leading developers and operators.
Hayley Rees, Managing Director of PIC Capital, said:“The UK retirement living sector is a growing market, with huge untapped potential that is increasing by the day as the population ages and the supply of new housing lags behind demand. It was vitally important for our entry into this sector that we found a partner that was aligned in our vision to generate considerable social value whilst providing value in the long term for our stakeholders. It was clear from our early conversations with the team at Octopus that they were this partner, and we look forward to working together to effect meaningful change in regional communities and society at large.”
Kevin Beirne, Head of Retirement Living at Octopus Real Estate, concluded: “We are delighted to be working with PIC on this retirement joint venture. Developing a greater amount of retirement communities at pace presents a brilliant opportunity for investors, operator partners, those approaching or in retirement, and for the UK and the Government’s Levelling Up agenda. In this sector, we work together in the knowledge that we are helping to combat some of the UK’s biggest problems, not least the housing crisis and pressures on health services.
“The launch of the Senior Living Investment Partners joint venture is further proof of the great potential of this rapidly growing alternative residential sector. PIC is at the forefront of driving change, embracing new ideas and identifying innovative solutions in the pensions industry, which aligns well with our vision of re-imagining real estate investment by considering purpose and impact as well as profit.”