L&G Investing £2 Billion In Purpose Built City Centre Retirement Villages
While many house builders heavily target the first time buyers market, insurance and funds management giant L&G is placing a £2 billion bet on the other end of the property investment spectrum – ‘last time buyers’. The financial services powerhouse has established a new subsidiary business called ‘Guild Living’, which will build and manage retirement villages it plans to locate in central urban areas.
The company is hoping to tap into what it believes is an underserved and rapidly growing market for high quality city centre accommodation for the elderly by building a total of 3000 residential units over 5 years. The properties, which will mainly be sold at between £250,000 and £1 million, with 10% to 20% held back as rentals, will form purpose built retirement communities that also contain healthcare and convenience services and amenities.
L&G’s move appears to look like a well-timed strategy with forecasts suggesting the number of over-85s in the UK is poised to double by 2041 and treble on today’s figures by 2066. 47 years from now Britain is expected to be home to 8.5 million residents aged 65 and over. The public and private sectors have both been slow to move to address the housing as well as health and care needs this quickly expanding demographic will require.
Guild Living is targeting struggling city centre retail sites to take over and convert into its retirement villages, which will include shops, cafes, restaurants, GP surgeries amongst other facilities, which will be open to the wider public. It is hoped the developments will have an additionally positive effect on surrounding high street footfall, which has dropped off alarmingly in recent years with the rise of online retail.
The first two Guild Living retirement villages will be hosted by Bath and Epsom and the newly formed company is also eyeing suitable sites in cities such as Edinburgh, Glasgow, Manchester, Birmingham, Brighton, Oxford, Cambridge and London. The Bath development, to be built on the former site of a city centre Homebase store is currently waiting on planning permission before work can start on a 250-home complex. The smaller Epsom project, 1 hectare to Bath’s 2, will be built on disused hospital land and as well as a retirement village will include apartments for staff working at the nearby hospital.
Another L&G company, Inspired Villages Group, acquired in 2017, is also focused on building and managing retirement villages and care homes. However, its strategy is different, focusing on out-of-town, rural sites. It has targeted the building of 4000 homes over the next 5 years.
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