PIC invests up to £200m in retirement village venture

Joint venture will finance the development of around ten UK retirement communities

Jonathan Stapleton
clock • 2 min read
The UK retirement living sector is a growing market

The UK retirement living sector is a growing market

Pension Insurance Corporation (PIC) has committed to invest up to £200m in equity to fund the development and operation of around ten new retirement communities across the country.

The insurer's investment - its first in the emerging UK retirement living sector - is a joint venture with specialist real estate lender and investor, Octopus Real Estate. The joint venture is called Senior Living Investment Partners.

The retirement communities developed through the joint venture are expected to provide homes for around 2,000 older residents and will include lifestyle and wellness facilities such as restaurants, gyms, spas, pools and resident communal spaces.

PIC Capital managing director Hayley Rees said: "The UK retirement living sector is a growing market, with huge untapped potential that is increasing by the day as the population ages and the supply of new housing lags behind demand. It was vitally important for our entry into this sector that we found a partner that was aligned in our vision to generate considerable social value whilst providing value in the long term for our stakeholders.

"It was clear from our early conversations with the team at Octopus that they were this partner, and we look forward to working together to effect meaningful change in regional communities and society at large."

Octopus said it works with retirement living operators to develop communities - noting it has an "immediate pipeline of prospects", ready to deliver top quality communities in the coming months and years.

Octopus Real Estate head of retirement living Kevin Beirne added: "We are delighted to be working with PIC on this retirement joint venture. Developing a greater amount of retirement communities at pace presents a brilliant opportunity for investors, operator partners, those approaching or in retirement, and for the UK and the government's levelling up agenda. In this sector, we work together in the knowledge that we are helping to combat some of the UK's biggest problems, not least the housing crisis and pressures on health services.

"The launch of the Senior Living Investment Partners joint venture is further proof of the great potential of this rapidly growing alternative residential sector. PIC is at the forefront of driving change, embracing new ideas and identifying innovative solutions in the pensions industry, which aligns well with our vision of re-imagining real estate investment by considering purpose and impact as well as profit."

This transaction is Octopus Real Estate's second retirement investment strategy; the first having invested the equity in retirement communities with over £700m of gross development value, or the projected value of a completed development, alongside leading developers and operators.

It is hoped the joint venture with PIC will deliver around £1bn of gross development value.


More on Corporate Governance

Industry Voice: SI dilemmas — is 'E' or 'S' more important?

Industry Voice: SI dilemmas — is 'E' or 'S' more important?

Sustainable investing has become mainstream, but it’s not a perfect science, with many challenges that practitioners must face.

clock 17 May 2022 • 2 min read
New research highlights consolidation could address key end game challenges for smaller DB schemes

New research highlights consolidation could address key end game challenges for smaller DB schemes

clock 21 February 2022 • 2 min read

Industry Voice Video: Using nature to offset emissions

clock 17 November 2021 • 1 min read