Schroder Real Estate and Octopus Real Estate have announced the second close for their UK Retirement Living Fund (ReLF) with an additional £40 mln (€44 mln) of investment, taking aggregated equity commitments to date to £140 mln.
Schroder Real Estate, the property investment arm of the global investment management group, is working with Octopus Real Estate, part of the Octopus Group and a significant investor in healthcare facilities throughout the UK, to invest in the development of new retirement villages.
ReLF partners with developer-operators to deliver retirement communities that include communal leisure and dining facilities, as well as care packages if required. The closed-end private real estate fund has already invested in four new retirement communities.
Robin Hubbard, head of real estate capital, Schroders, said: 'In an uncertain real estate market where value is hard to find, investors have been attracted to this mid to high-end segment of the UK retirement sector which is highly undersupplied, but underpinned by undeniable structural demand drivers such as demographics, more active and higher quality lifestyle aspirations and probably the wealthiest cohort of retirees that there ever has been or will be.
'From an impact perspective, downsizing retirees will free up larger family homes and breathe life back into elderly neighbourhoods, while reducing the loneliness of the retirees who will typically lead a mentally and physically fitter life in a retirement community, thereby deferring and/or reducing the healthcare burden on the NHS.'
Kevin Beirne, director retirement, Octopus Real Estate, added: 'This second close for the fund is a confidence boost for the future of retirement communities, which has been resilient in the face of the difficult conditions presented by the pandemic. We have seen the underlying strength of retirement communities and they will likely continue to show real resilience in the future.
'We are delighted to be working alongside Schroders in a rapidly growing sector that will create an impact on both a fund level and a social level. We are working on a strong pipeline and are looking forward to delivering more communities in the coming months and years.'
Schroder Real Estate forms part of Schroders’ private assets business. This capability includes private equity, infrastructure, microfinance and impact investments, insurance-linked securities and securitised credit and has combined assets under management of £45.3 bn.
