Summary of our market study

The global market for nursing homes and care facilities is experiencing rapid growth, driven largely by an aging global population, particularly in developed countries. In Portugal, a significant market expansion is observed, especially in the Algarve region, with the country’s elderly population (over 65 years) representing approximately 22% of the total population as of 2020. The Portuguese market consists mainly of publicly-run and non-profit institutions, with a recent trend toward private entrants offering premium services, including individualized care and luxury amenities. There is an increasing demand for autonomous living solutions, where the elderly can retain more independence, living in fully-equipped accommodations that allow for a sense of community. However, there is a significant number of elderly individuals at risk of poverty, with a sizable proportion living alone, suggesting financial constraints may limit access to these services for some. Despite the market's challenges, projections to 2060 anticipate that more than 13% of Portugal’s population will require third-party care, underscoring the potential for continued market growth and the pressing need for innovative and affordable elderly care solutions..Title: Navigating the Portuguese Nursing Home Landscape: Ageing Trends and Premium Service Demands Within the Portuguese market, there is a significant trend reflecting the global demographic shift towards an ageing population. Currently, senior citizens, those over 60 years old, represent a substantial and growing segment of the populace, with projections indicating that by 2080, the number of elderly (65 and over) may surge from a range between 2 and 2.5 million to approximately 3 million. This demographic shift underpins the expansion potential of the nursing home market, fuelled by a notable gap between the rising life expectancy (now averaging between 80 and 82 years) and healthy life expectancy, which has seen a modest increase. Portugal's old-age dependency ratio underscores the trend, especially in regions such as Trás os Montes e Alto Douro, Beira Interior, and notably Alentejo. However, the Algarve region, with its appealing climate and thriving expatriate community, is also seeing an influx of a wealthier demographic seeking premium nursing home services. Despite the burgeoning elderly population, there's a marked gap in the healthcare labor force, leading to a reliance on informal caregiving, which is higher in Portugal compared to other European countries. The Portuguese market has also identified new trends in retirement home offerings. There is a discernible shift towards autonomy among potential residents, with a preference for institutions that provide a more active and community-engaged lifestyle. The Aldeia de São José de Alcalar project in the Algarve is a prime example of this successful model, blending independence with optional support services. Another emerging preference is for premium retirement homes, where wealthy seniors seek luxury facilities akin to five-star hotels, coupled with high-end medical and personal support services. Leading players are capitalizing on this demand by creating luxurious facilities complete with opulent amenities. This segment's pricing reflects its upscale nature, with monthly costs for permanent stays in a single-room occupancy starting from approximately €1,100 and going as high as over €2,000. Short-term stay pricing follows suit with similarly elevated ranges. Parallel to the rising demand is the emergence of novel cohousing projects, although not yet prominent in Portugal, where seniors take cooperative ownership and management of their living spaces. Additionally, platforms like Lares Online have materialized, enhancing market transparency and competition by allowing users to review and compare nursing home offerings easily. Despite the allure of these advanced offerings, it's notable that the average pension in Portugal - varying between €450 and €.Title: Key Players Shaping the Future of Nursing Home Services: A Detailed Look Within the nursing home industry, certain companies stand out due to their size, service quality, market position, and innovative approaches to elder care. Here we explore some of the main players highlighted in the market overview, offering insights into their contributions to the sector and how they are poised to adapt to the evolving needs of the aging population. ### Brookdale Senior Living Brookdale Senior Living is one of the largest players in the USA with an extensive network of retirement communities. They offer a range of services, including independent living, assisted living, memory care, and skilled nursing, catering to various levels of elder care needs. Brookdale's facilities are equipped with amenities and programs aimed at enhancing the quality of life for residents while providing professional medical oversight. ### Genesis Healthcare With a strong presence in the USA, Genesis Healthcare operates numerous nursing facilities and senior living communities focused on providing high-quality care and rehabilitation services. They specialize in offering skilled nursing, assisted/senior living services, and Genesis Rehab Services, which include physical, occupational, speech, and respiratory therapies. ### Golden Living Golden Living, another prominent US-based institution, manages numerous living centers and provides a range of services, including skilled nursing care, therapy services, and assisted living options. Their focus lies in delivering personalized healthcare plans to ensure each resident receives the attention and care best suited to their individual needs. ### HCR Manor Care HCR Manor Care, now part of the ProMedica health system, is known for providing high-quality care across its extensive network of facilities. The company specializes in short-term post-acute services and long-term care with a strong emphasis on patient-centered environments and innovative care delivery models. ### Bupa (UK) As an international healthcare group, Bupa operates care homes across the UK and is recognized for its focus on providing tailored care and support to seniors. They foster a homely environment with facilities designed to encourage independence and offer comprehensive care plans, including dementia care and specialized nursing support. ### Extendicare (Canada) Extendicare stands as a leading care provider in Canada, offering long-term care, home health care, and retirement living services. Their wide-ranging service capabilities enable them to address the diverse needs of seniors, focusing on quality, innovation, and compassion in their approach to care. ### Korian (France) With a significant presence in France and other European countries, Korian is dedicated to providing elder care services, including nursing care homes, assisted living, and post-
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Summary and extracts

1 Market summary

1.1 Market definition and presentation

A nursing home, is a structure that welcomes people over 60 years of age who are physically and/or mentally dependent demanding permanent supervision by a medical team. This medical facility offers individual or collective rooms and also offers assistance with daily life as well as personalized medical care, catering, laundry services, entertainment, etc.

In Portugal, we find the terms of "Lar para idosos" (home for the elderly), which are residential facilities, guaranteeing and providing food, health care, hygiene and comfort. These are also called places of stimulation and cohabitation, where lderly people can spend their free time through social activities. There are also the "Residências para idosos" (retirement homes), which are similar to homes, but with the privacy of a single room or a studio.

The nursing home sector has been growing rapidly over the past 10 years. This is explained by the ageing population as well as the increase in illnesses. This phenomenon is pronounced as binding regulations create a barrier for new entrants. The potential clientele of nursing homes is constantly increasing and new trends are arising, such as premium services, more independency and precautions regarding COVID-19 and flue infections. Institutions must adapt to these structural changes in order to attract people who are still afraid of leaving home. Besides all the difficulties present to enter this market, there is still an enormous margin for it to grow.

1.2 A growing worldwide market

The industry of Nursing Homes and Care Facilities includes continuing care retirement communities and assisted living facilities for the elderly. The former offer personal care (***) in a variety of residential settings and include on-site nursing care facilities. The later, provide similar room, board, supervision, and daily assistance services, but do not ...

1.3 The Portuguese market

Following the world trend, the Portuguese market for retirement homes is becoming increasing, particularly on the Algarve region (***). [***]

The services offered consist mainly of one-bedroom flats or a combination of flats and villas, which can be purchased freehold or leasehold. It is hard to estimate precisely the market for medicalized retirement ...

2 Demand analysis

2.1 New demographics

The medicalized retirement home industry is believed to be strongly influenced by changing demographics. The largest age group in Portugal, indeed, is the one represented by the so called “over **”, which define approximately **% of the entire population. The database from the Portuguese National Institute of Statistics show that this age group ...

2.2 Profile of seniors in Portugal

Senior citizens, who are people over ** years old, are increasingly numerous in Portugal. This is, above all, linked to an increase in life expectancy, which is gradually rising from **.* years old at birth in **** to **.* years old in ****. At the same time, healthy life expectancy at birth has not enlarged in ...

2.3 Where do senior citizens live?

The old-age dependency ratio is the ratio of people older than ** to the working-age population--those ages **-**. Data are shown as the proportion of dependents per *** working-age population. Analysing the old-age dependency ratio by municipality, we notice some concentration at the Northeast of the county, around the regions of Trás ...

2.4 How and how long?

If we look at the distribution regarding how much time the elderly stay at those types of residence, we will notice that the vast majority do not stay more than * years. In other words, the retirement homes indeed happen to be the place to spend the last years of their ...

3 Market structure

3.1 Organization and dynamics of the market

Given the estimated decrease in the population (***), more than **% of the population will then be dependent on third-party care. This worrying scenario is outlined in a report by the European Commission on health care, long-term care and sustainability of public accounts.

In the coming decades, due to accelerated ageing and technological ...

3.2 New trends

Residents wish for more autonomy

If, on the one hand, we find that the main reasons for entering a home are the state of poor health, psychomotor difficulties and lack of autonomy for the activities of daily living, it is also true that, in the current model of home (***), there is ...

3.3 A new refuge for the British

Since ****, European retirees who settle in Portugal are exempt from paying taxes for ten years of the pension they receive in their home countries. This tax relief has seduced thousands of retirees from all over Europe, and a big part of them are the British. It is estimated that there are ...

COVID-19 impact expectations

The unexpected Covid-** outbreak took all the retirement homes managers and employees by surprise, resulting in a high percentage of positive cases and associated mortality rates in several residences around the world. This situation served as an in-depth reflection on this type of institutions, essentially in terms of rethinking its function ...

4 Analysis of the offer

4.1 Historical short of supply

The use of this kind of solution to treat and care for fragile elderly people is somewhat new. In the beginning of the ‘**s only *% of the elderly population had a place in nursing homes. A significant increase in the number of nursing homes units created by the solidarity network took ...

4.2 Great price variance

As one would expect, prices vary according to the amount of nursing care required by the person, to the region’s cost of living and how premium the location is in terms of natural beauty and distance from city centres, for instance. The cost per person may also be reduce in ...

4.3 Segmentation in terms of recovery programs

Some residences may cover some specific treatments or either adapt to all the needs of any potential client. Nevertheless, we tried to segment some areas of recovery that players usually offer to their seniors.

Neurofunctional Recovery

Conducted by a team of physiatrists, neurologists, neuropsychologists, physiotherapists, occupational therapists and speech therapists. A ...

4.4 Included services versus a la carte services

Senior citizens' residences differ from each other in that they offer regarding a certain number of services and activities, in addition to the rental or purchase of housing adapted to senior citizens. An example of an offer is as follows:

Rental accommodation (***) Home purchase (***) Additional services and activities

It is these ...

5 Rules and regulations

5.1 Regulation

The economic activity of a Nursing Home is included in the CAE *** group - Social Action Activities, more specifically in subclass ***** - Social action for elderly people with accommodation.

The main regulations that future and current players should beat in mind are listed below:

Decreenº **/****: about functioning and installation of residential ...

5.2 Medical benefits

Complemento por Dependência

Complemento por dependência, or “supplement by dependency”, is a cash payment given to necessary people and the elderly who are in a situation of dependency, that is, who provides daily help from another person (***).

For this Complement, two degrees of dependence are considered:

*st grade ...

6 Positioning of the actors

6.1 Segmentation

  • Santa Casa da Misericórdia de Alhos Vedros
  • Residências Montepio
  • Monte da palhagueira
  • José de Mello Residências e Serviços (Groupe)
  • Luz Saùde
  • Orpéa

List of charts presented in this market study

  • Espérance de vie vs espérance de vie en bonne santé à la naissance
  • Difficultés à prendre soin de soi en fonction de l'âge
  • Répartition des types de logements recherchés par les utilisateurs
  • Répartition des séjours en maison de retraite par durée de séjour
  • Evolution du nombre de structures résidentielles pour les personnes âgées dépendantes

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Latest news

Orpea hopes to reinvent itself under the aegis of Caisse des Dépôts - 08/01/2024
  • On December 19, 2023, Caisse des Dépôts et Consignations took control of Orpea with 50.18% of the capital.
  • Orpea's share price fell by 99.7% in 2023.
  • Orpea employs 76,000 people, including 45,000 caregivers, and more than 260,000 residents. Orpea plans to divest 500 million euros a year for three years.
Orpea launches a capital increase of around 3.9 billion euros - 13/11/2023
  • Private nursing home group Orpea plans capital increase of around 3.9 billion euros
  • Orpea's total debt exceeds 9 billion euros.
  • Orpea's financial restructuring includes three successive capital increases, totalling 5.4 billion euros.
  • On completion of the restructuring, a consortium led by Caisse des Dépôts, with Maif, CNP and MACSF, will own 50.2% of Orpea's capital, creditors will own 49.4%, while current shareholders will have 0.4% (if they decide not to participate in the capital increases).
Orpea: Ehpad occupancy rates recover - 07/11/2023
  • Average occupancy rate for retirement homes in France in the third quarter of 2023: 84.4
  • Year-on-year sales growth: +11.1
  • Nine-month total sales: 3.9 billion euros
  • Nine-month sales growth: +10.8
  • Sales target for 2026: 6.4 billion euros
  • Occupancy rate target (clinics and Ehpad) in 2026: 90.8
  • Expected sales in 2023: 5.2 billion euros Expected occupancy rate in 2023: 84% (vs. 81.6% in 2022)
  • Planned capital increases: 3.9 billion euros
  • Share of capital held by the consortium led by Caisse des Dépôts in December 2023: 50.2%.
  • Net debt at the end of 2023: 4.65 billion euros.
Trade unions accuse Orpea of being involved in speculative real estate activities. - 24/02/2022
  • All of the company's real estate assets, located in several European countries and valued by Cictar at 7.4 billion euros, "were acquired and then sold off through complex arrangements involving companies in Luxembourg and the British Virgin Islands, most of which were never disclosed to shareholders or the public", the report states.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Santa Casa da Misericórdia de Alhos Vedros
Residências Montepio
Monte da palhagueira
José de Mello Residências e Serviços (Groupe)
Luz Saùde

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