Aging & Society: Eighth Interdisciplinary Conference

Abstract

The rapid growth of the 75+ population in European and Asian countries forces us to consider the necessary provision of new nursing homes. In a context of a shrinking welfare state, financial investors and property developers are increasingly driven towards the market for institutional care. Unlike previous studies on nursing homes that primarily focus on care services, this paper takes the perspective of the provision of built space. More specifically, it examines to what extent and under what conditions the securitization of nursing homes through Healthcare REITs (HC-REITs) may contribute to satisfying the needs of dependent elderly. The development of HC-REITs is promoted with the rationale to encourage healthcare providers to expand their core activity by transferring the ownership of their properties to specialized property managers. HC-REITs are also expected to increase the supply of nursing homes by constructing (or entrusting developers to construct) new facilities. Yet despite their comparatively attracting characteristics for investors, HC-REIT markets are not experiencing significant growth. This paper gives evidence of several structural impediments to REIT development, drawing on a cross-country survey of three major REIT markets (in UK, France, and Japan) involving in-depth and structured interviews of a range of players in the healthcare and real-estate industries. It highlights, in particular, the role of stringent financial criteria that limit the selection of properties and reduce the consumer base. These findings contribute to bringing a more nuanced approach to the view that finance capital can be a mainstream supplier of social assets.