Caring for the elderly: A booming business

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BOOMING: Investment funds are infiltrating the sector.


Life expectancy continues to grow exponentially in Spain, as it nears 83 years on average. Not coincidentally, Spain is among the first countries with the highest life expectancy. And forecasts expect the country to hold the number one position in 2040.

Taking this information into account, it is not surprising that the demand for nursing homes for the elderly is through the roof. Investors are aware of the fact and know that there are barely any public options. This has given new companies in the trade free reign, allowing them to thrive in the business of residential care homes. Given that business is booming, investment funds have joined the party in the hope to also infiltrate the sector.

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According to new information, the turnover for companies in residential management grew almost four per cent in 2018, totalling €4,500 million. And in 2018, there were 381,340 available places in residential care homes, including public and private residences.

The popular strategy for these residences is to be located on the outskirts of towns and cities. The location reduces costs and ensures that there are more available rooms for the elderly, while demand is assured. Therefore, investment funds don’t hesitate to place their confidence in nursing homes and their healthy business model.


This is the case for groups who have the largest market share in Spain. French fund PAI Partners bought the two largest national operators, Geriatros and SARquavitae and merged them to create DomusVi, that currently offers more than 25,000 spots in residences.

Such is the boom experienced by nursing homes, that not only mutual funds are betting financially on these groups. Proof of this are the new public limited companies that are surfacing in the sector. One of them is Healthcare Activos Inmobiliarios, a real estate company that purchases nursing homes and hospitals throughout Spain. Another company is Adriano Care, a project that launched in June 2019 with the final objective of investing €250 million in residential care homes.

Even Amancio Ortega -the richest man in Spain- has taken an interest in the elderly and their care. He recently donated €90 million to the Xunta de Galicia, in order to build seven residences with a total of 900 places.


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