“With an experienced partner in bulwiengesa, we conducted a survey into the future of the German care home real estate market. Among the key questions we wanted to provide an answer to was: What do we need to do to negate the universally predicted undersupply of care places – not only to paint a more transparent picture of our asset class, but also to stimulate the development of needs-based real estate solutions for inpatient care
While all eyes are on the rapid development of demographics and long-term care rates, we are broadening our horizon and looking at the real estate side as a major determining factor in the number and quality of current and future care provision.
Our survey clearly finds that Germany is heading for massive excess demand.
The different regulations in each of Germany’s 16 states are the main reason that the supply of care places is not keeping pace with rising demand. These add to the complexity of building care homes and have resulted in a highly fragmented market. The primary objectives of our survey are to increase the transparency of the German care home real estate market and explore how innovative solutions, including the Cureus system approach, can and must play a role in overcoming current and future challenges”.
– Gerald Klinck, CFO Cureus GmbH Read more...
"Analysis and Outlook of Germany’s Care Home Real Estate Market"
Would you like to find out more? You can download our survey here.
Key findings at a glance
Boomers are getting old: In 2040, one in six seniors will be aged 85+
Germany is getting older in three ways: in absolute terms, in relative terms, and as a result of the increase in the very old (85+). In around 20 years, a total of 23.5 million people will have reached the age of 65. The proportion of very old people will increase by 1.87 million to 16% between 2011 and 2040, accompanied by a corresponding growth in the demand placed on our care and support structures.
Inpatient care already has an occupancy rate of 92.3%
The reason for these high occupancy rates is that 10 of Germany’s 16 states already have above-average care rates. In addition, there is a massive increase in the number of people in need of care, which is set to rise to around 5.59 million by 2040. Of these, as many as 1.3-1.4 million are expected to need inpatient care, which will require not only many more care workers, but also more care homes.
Existing care homes
Existing care homes
Around one third of care properties are more than 40 years old
Despite current and planned project developments, the stock of care home real estate in Germany is aging rapidly. Years of neglecting modernisation measures and a lack of new construction are leading to a shift in building age categories toward care homes that are predominantly 21 to 30 years old, followed by those that are more than 40 years old. As of today, 29 percent of care homes were built more than 40 years ago. In total, there are 886,600 inpatient care places existing in Germany.
New care homes
New care homes
Cureus is developing 20% of the confirmed new care home capacity
Pflegemarkt.com’s Bauradar reports a total of 444 care homes comprising around 35,472 places as currently in planning, under construction or completed between 2018 and Q2/2021. Based on these figures, the more than 7,000 care places currently being developed by Cureus account for a market share of around 20%, making Cureus the care market’s top property developer.
Rising demand meets substantial shortage of supply
In order to satisfy the growing demand for inpatient care places, an additional 372,000 places are needed by 2040. And even this may not be enough: If replacing and/or modernising aging care homes is factored in, the figure rises as high as 472,000 places. However, if construction were to continue at current rates, only 304,000 places would be created by 2040, resulting in a shortage of up to 168,000 inpatient care places.
Given the current rate and volume of construction, there is no way the development of new care capacities can possible keep up with the projected increase in demand. The system approach developed by Cureus GmbH, which focuses on standardisation and scalability in the development and construction of care properties, can make a major contribution to boosting the provision of care places. – Frau Dr. Piasecki, Bulwiengesa