Belgian REIT Aedifica enters German senior housing market

We report elsewhere in this issue on new studies focused on the market for managed- and elderly care homes in Germany, and looming shortages in Germany’s regions. This month saw the first move into the German market by Belgian REIT Aedifica, who in addition to furnished and unfurnished residential housing and hotels, also specialises in senior housing in its home market, where it is the second-largest investor.

Brussels-based Aedifica paid about €8m for a recently-completed property, Seniorenzentrum AGO Herkenrath, located in Bergisch-Gladbach, near Cologne in North Rhine-Westphalia. The facility is operated by AFO and has 80 beds. The initial gross rental yield was 7.25%.

Commenting on the deal, Aedifica’s CEO Stefaan Gielens said, “Investing in German rest homes is the logical next step in Aedifica’s effort to diversify its assets within its main strategic segment, collective senior housing. Germany presents a significant investment opportunity in this segment: it offers the largest European market,and an even stronger demographic trend toward an ageing population than in Belgium.

”Care operators continue to grow and consolidate and, as in all western European countries, the need for financing solutions for real estate infrastructure in the healthcare sector will inevitably grow. Finally, Germany offers the best risk profile of any country in the Eurozone.”

Aedifica in Belgium has a total of €620m of assets under management, including development projects valued at €20m. In the senior housing sector, it traditionally operates through sale-and-leaseback agreements or by investing in new projects. It negotiates long-term indexed and irrevocable contracts, normally a minimum of 27 years, with specialised operators. Belgium’s laws have just recently been amended to permit residential REITS to buy assets in other European countries.