Legal & General has taken its first step into the retirement housing market by acquiring an existing UK operator and £40m (€44.3m) of assets.
The UK insurer said it aims to build 3,000 homes for older people over the next five years.
L&G paid £40m for Inspired Villages — a company previously known as English Care Villages — with the price including two existing retirement complexes and the firm’s management.
It estimates that 3.3m people in the UK would like to downsize, while only 7,000 specialist homes for older people were built last year.
Nigel Wilson, L&G’s chief executive, said: “Despite the fact that the UK is a great place to invest, 30 years of chronic underinvestment have led to poor productivity, inadequate real wage growth, market failures and low economic growth.”
Accommodation for older people was a classic example of underinvestment, he said.
L&G said that, as well as running Inspired Villages’ two housing schemes in Warwick and Cheshire, which contain around 300 homes between them, it was looking for further development sites of around 10 acres.
The Warwick and Cheshire properties had a combined gross development value of £110m, L&G said.
Inspired Villages used to own the two residential schemes in partnership with housing association Places for People.
L&G said the cash injection it was providing would allow the business to rapidly expand its development pipeline.
“Creating around 3,000 new, quality homes over the next five years, our aim is to become a leading later living housing operator,” L&G said.