Sint-Niklaas, Care Real Estate Belgium

Some 140 Care Real Estate professionals participated in the annual Care Real Estate Belgium event on October 24. This initiative of Spryg Real Estate Academy took place this year at hotel Serwir in Sint-Niklaas. Led by Stefaan Gielens (ceo of Aedifica), several leading market players looked together at the future of healthcare real estate in Flanders. The Flemish government was also represented, in the person of Tom Vermeire, department head of residential care and first line of the Flemish Care Agency.

Joels Schols.

"Healthcare and healthcare policy are evolving rapidly, characterized by rapidly changing legislation, among other things. Many of these changes have an impact on the financing of the sector," Vermeire said. More concretely, he explained which powers will shift from the federal to the Flemish level on Jan. 1, 2019, as part of the sixth state reform, and how Flanders intends to interpret these powers. They concern not only elderly residences, but also initiatives for sheltered housing, home care and psychiatric care homes. Hospitals remain a federal matter for the time being.

Flanders bundles its care responsibilities financially into the Flemish Social Protection (VSB). The entire budget for this amounts to 3.94 billion euros. Actually, you can speak of a Flemish social layer on top of the federal social security. "We draw our care goals from the point of view of the person in need of care himself," he stated. This was not directed against the operators of care institutions. "When we took over authority over care, we noticed that primary care was a mess."

From the banking sector
Wim Boon, business development manager and sector expert on social profit and local governments at the bank KBC, discussed healthcare real estate financing from the banks' perspective. He went over conditions and developments and also pointed out opportunities that are emerging today or soon. "People are not only getting older, they are also counting more and more healthy years of life. Residential care centers are no longer automatically full," he warned. With assisted living, he attached importance to possible linkage with an assisted living facility.

Scale matters
Kristof Vanfleteren, managing partner of project developer Ion outlined his vision for the future of assisted living and life-long housing. Ion is a relatively young company, yet already has about a billion euros worth of projects in the pipeline. With the government's current approach, he no longer sees a role for developers in the construction of new assisted living facilities, but he does see a role for assisted living homes. "Experience taught us that successful assisted living homes must meet certain criteria. Important is scale; clusters of 40 to 60 units are ideal, but blocks with more than 100 housing units are not attractive. They also need to be in an environment with urban services at hand."

Sébastien Berden, COO healthcare at listed real estate company Cofinimmo, gave his views on the future and prospects for healthcare real estate and the healthcare sector in terms of building management, project development and credit and market control. Cofinimmo has an international portfolio of 145 residential care centers, rehabilitation, psychiatric and acute care clinics and more than 12,800 beds in four countries. This makes it one of the leading investors in healthcare real estate in continental Europe. Cofinimmo's patrimony has long consisted of traditional real estate, but today it is intensively converting it into care real estate.

Investment opportunities for large audiences
Cofinimmo and Aedifica are regulated real estate companies (Sicafi) or real estate investment trusts. "They offer the general public the opportunity to invest in healthcare real estate," Berden said. "In Belgium today, there are only 15 of them. This puts us tremendously behind our neighboring countries. Moreover, our gvv's are only active in elder care, in other countries they also invest in hospitals, for example."

Tom Vermeire represented the Flemish government.

Joël Schols, healthcare director and partner at ICT company Nextel, went over the current possibilities and future developments of smart ICT and data networks and the impact they (could) have on healthcare real estate. "Innovative developments such as assistive technology have a major impact on communication, comfort, safety and efficient working in both residential care centers and assisted living facilities," Schols said. He made a case for smart simplicity. "A smart care building is created when systems for emergency call, comfort, safety, lighting and HVAC are dynamically connected and ICT controls the subsystems." A lot of existing applications, such as thermostats, he says, are too complicated. "For some older people, turning a key in a lock requires too much force. Digital locks, to be opened with a badge, for example, are much more user-friendly."

Kristof Vanfleteren.

Home care may be more expensive
Véronique De Schaepmeester, managing director of the Vlaams Onafhankelijk Zorgnetwerk (Vlozo, the umbrella association of independent operators of residential care centers) gave an overview of the most relevant topics today that affect care and care real estate: de-funding, scoring, personal budgets, the recognition calendar, subsidies,.... "Technological developments enhance the possibility of living at home for as long as possible. But home care is often more expensive than care provision in residential care centers, therefore the further expansion and support of residential care should not be overlooked. Home care also cannot always meet the specific demand for care, making a qualitative expansion of the residential elderly care sector opportune. Current resources are insufficient to have 100% rest and nursing home coverage for all those in need of heavy care," she underscored. "The need for nurses is great. The revision of RD 78 allows several nursing tasks to be delegated to caregivers. This also forces a revision of recognition and funding standards for nurses."

Debate
As the finale - not counting the networking reception for a moment - of the event, there was a debate between some of the leading operators of elderly housing. According to Geert Uytterschaut, COO at Armonea, a lot is moving today in Flanders, while in Wallonia and Brussels elder care is evolving more slowly. "Maybe things are moving a little too fast with us," he suggested. Dominiek Beelen, CEO at Senior Living Group noted that the German community in eastern Belgium, which is also responsible for care, is betting on residential care centers that specialize in certain pathologies.

Healthcare Real Estate Belgium had about 140 participants this year.

The panelists went on to discuss the role of the government. "The public sector is not legally obliged to organize residential care," said Johan De Muynck, CEO of Zorgbedrijf Antwerpen. The direction lies with the Flemish government, which has the financial leverage and thus controls what can come. But it is the municipalities that decide what will come. "In most municipalities where the local OCMW organizes residential care, the municipality has to step in financially," Beelen responded. Luc Van Moerzeke, CEO of Vulpia, pointed to the exemplary role of the city of Ghent. "That had the needs mapped first and, based on that information, issued permits in the right places." As a result, residential real estate is following suit. Elsewhere, assisted housing sometimes struggles to find tenants.

Text | Koen Mortelmans  Image | Petra Vermeer Photography
Featured image:  Véronique De Schaepmeester speaking.