Goldman Sachs has backed a new later living developer to build a £2bn London portfolio of luxury flats to take advantage of the growing trend for the rich and elderly to downsize.
The investment bank has thrown its weight behind Riverstone Living, which is planning to develop five to 10 projects in Greater London including in the prime inner boroughs of Kensington & Chelsea, Westminster, Camden and Wandsworth.
As well as providing on-site and in-flat private healthcare, Riverstone Living’s developments will aim to emulate the feel of a members club and residents will have access to a spa, swimming pool, gym, restaurant, bar, hairdressers, housekeeping services, chauffeurs and a cinema. If residents decide to move out or pass away it will be possible to sell the flats in the open market.
The concept is being targeted at over-65s living in London who want to remain in the capital when they sell up in an area they know and are comfortable in so they can retain their friendship circles and avoid loneliness.
Each scheme will have an end value of around £200m made up of 150 to 200 flats across 150,000 sq ft to 200,000 sq ft. It will acquire the sites over the next two years with the portfolio expected to be fully built out in around five years. It is possible that Goldman will ultimately consider a listing of the business as an eventual exit.
Riverstone Living has already acquired its first site, the second phase of Fulham Riverside, SW6 from Barratt and L&Q where it is planning a 162-flat project, which will include one, two and three-bedroom units. Construction at Fulham Riverside will commence early in 2019 and complete by the end of 2021.
Although there are a small handful of established players in the later living sector such as McCarthy & Stone and a few new entrants such as Auriens, Goldman is looking to create a clear industry leader of scale in a market that is broadly considered to be growing and undersupplied. According to research from Knight Frank there is only one retirement living home in the UK for every four people wanting to downsize.
Goldman’s balance sheet investment is being made through its European special situations group. The bank has historically been a major investor in real estate-backed, operational platform businesses. Most notably it owns the £3.2bn UK student accommodation business iQ alongside The Wellcome Trust.
The Riverstone Living team
- Julian Mercer, head of corporate. Former director of residential and assisted living company BMB Property Developments.
- Paul Pheysey, head of land acquisition. Former director of BMB Property Developments.
- Paul Vesty, head of development. Former development director at Northacre.
- Meriam Makiya, head of sales and marketing. Former partner and head of prime London development team at Knight Frank.
- Philip Mahoney, chief operating officer. Former vice president of food & drink at Radisson Hotel Group
The growing later living market
- 20%. Forecast increase in the over-65s population by 2027 to 12 million
- 4. Number of people demanding a UK retirement home for each one currently available
- 28%. Expected increase in the number of UK private retirements homes by 2023
- 25%. Percentage of over 55’s that would consider downsizing into specialist retirement living accommodation
- £44bn. Forecast value of retirement living market by 2022.
Source: Knight Frank
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