AviaRent launches new €500m assisted living fund

AviaRent Capital Management, which specializes in social infrastructure funds, is teaming up with developer and operator Convivo to launch it its new open-ended Spezialfonds, “Care Vision IV”, targeting an investment volume of €500m.

The assisted-living fund has already secured a pipeline of twelve properties from its existing partnership with the Convivo Group, which develops and operates care and retirement properties. The pipeline developments are all CONVIVO PARKS; a special concept that combines assisted living, day care and shared flats for senior citizens with a housing guarantee and cost cap for residents.

According to Yenna Haack, the new CIO of AviaRent Invest AG, “We now see assisted living as an asset class in its own right. With our focus on the Assisted Living Plus segment, we are concentrating on developing assisted living facilities for senior citizens and will continue to establish, promote and further develop this model in the market.”

AviaRent, headquartered in Frankfurt and Hamburg, was an early pioneer in the assisted living sector, and launched its first “CareVision I” fund with a focus on care properties in 2009. The successor funds followed in 2013 and 2016. Investors will again be German insurance companies, pension funds, superannuation schemes and foundations.

In contrast to the earlier funds, this latest fund is targeting a diversified portfolio of nursing properties, assisted living and nursing homes that specialise in dementia and alternative forms of living, such as senior citizens shared apartments. It will focus on core investments with long-term cash flow, with a term of ten years and extension options for a total of two years. The targeted distribution yield is 4.75% annually.

Demand for assisted living is increasing, according to AviaRent data. By 2030, more than four million people in Germany will require nursing care, the fund manager said.

Convivo is currently developing some €500 mln of Convivo Parks with another €1.5 bn worth of properties in the planning stages. More than 80 of these residential parks are set to be built by 2025. AviaRent is refinancing the project tranches related to the Care Vision IV fund through its typical sources of church institutions, social banks and local banks, said Ms. Haack.

According to Andreas Weber, head of strategic marketing at Convivo Group, “Modern senior living needs to be rethought: In order for residents to live in one of our Convivo Parks, a doctor must find there is a need for nursing home care. And because nursing care needs change over time, we offer our residents a special feature: a housing guarantee in the event they need a higher level of care.”

Together with its French partner Primonial, which manages fund assets of more than €16 billion, AviaRent has a combined fund volume of more than €4.5 billion in the care and education sectors in Germany. The AviaRent portfolio consists of care properties with around 5,100 nursing beds, 1,200 assisted living units, 2,000 places in day-care centres and 2,100 micro-apartments.