Pension Insurance Corporation (PIC) is planning to invest up to £200m (€232.6m) in the UK retirement living sector through a partnership with Octopus Real Estate.

The specialist insurer of defined benefit pension funds has marked its entry into the UK retirement living with a commitment to make the investment in equity to fund the development and operation of around 10 new retirement communities across the country.

Through the Senior Living Investment Partners joint venture, PIC and Octopus Real Estate expect to provide homes for around 2,000 older residents. The venture expects to deliver a portfolio with a gross development value of around £1bn.

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.”

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, said Kevin Beirne, the head of retirement living at Octopus Real Estate.

“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 venture represents Octopus Real Estate’s second retirement investment strategy; the first having invested the equity in over £700m of retirement communities’ gross development value, or the projected value of a completed development, alongside leading developers and operators.

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