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PIC invests up to £200 million in UK retirement villages joint venture with Octopus Real Estate

30 Jun 2022
  • First investment into retirement living for PIC
  • Senior Living Investment Partners to finance development of around 10 retirement communities across the UK

Pension Insurance Corporation plc (‘PIC’), a specialist insurer of defined benefit pension schemes, today announces it is making a commitment to invest up to £200m in equity to fund the development and operation of around 10 new retirement communities across the country in its first investment into the emerging UK retirement living sector.

Senior Living Investment Partners is a joint venture between PIC and leading specialist real estate lender and investor, Octopus Real Estate. 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.

Octopus is a significant investor in alternative real estate throughout the country, specialising in care homes, retirement living and affordable housing. This is Octopus Real Estate’s second retirement investment strategy; the first having invested the equity in over £700 million of retirement communities’ Gross Development Value, or the projected value of a completed development, alongside leading developers and operators.

Aiming to deliver c.£1bn in Gross Development Value, the joint venture’s primary objective is the development of a portfolio of new, high-quality, retirement communities nationwide against a backdrop of undersupply and increasing demand, driven by a growing ageing population. It will also deliver additional positive social benefit through local employment creation in both the construction and operation of these communities.

Additionally, retirement villages ease pressure on the NHS through the provision of onsite medical facilities and wellbeing amenities which promote a healthy lifestyle for older residents. It is estimated that each person in a retirement home saves the NHS and social services c.£3,500 per year.

The strategy of developing retirement communities is in line with the Government’s Levelling Up White Paper published earlier this year, which announced a cross-department task force on housing for older people to explore ways to expand housing options for older people across the country.

Hayley Rees, Managing Director of PIC Capital, 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 works with leading retirement living operators to develop communities, and has an immediate pipeline of prospects, ready to deliver top quality communities in the coming months and years.

Kevin Beirne, Head of Retirement Living at Octopus Real Estate, concluded:

“We are to 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.”


Notes to editors

About PIC
The purpose of PIC is to pay the pensions of its current and future policyholders. PIC provides secure and stable retirement incomes through leading customer service, comprehensive risk management and excellence in asset and liability management. At 31 December 2021, PIC had insured 282,900 pension scheme members and had £51.1 billion in financial investments, accumulated through the provision of tailored pension insurance buyouts and buy-ins to the trustees and sponsors of U.K. defined benefit pension schemes. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (FRN 454345). For further information please visit www.pensioncorporation.com

Octopus Real Estate is the trading name of Octopus Investments Ltd (Reg No 03942880), Bridgeco Ltd (Reg No 6629989), Fern Trading Group Ltd (Reg No 6447318), Octopus Commercial Term Ltd (Reg No 13486353), Nino Ltd (Reg No 9015082), Octopus Administrative Services Ltd (03974202), Octopus Healthcare Development Ltd (Reg No 03788979) and ORE Lending Ltd (Reg No 12908588)), all registered in England & Wales at: 33 Holborn, London, EC1N 2HT, and Octopus Real Estate S.ar.l. (Reg No B189290) registered in Luxembourg at: 412F, Route d’Esch, Grand Duchy of Luxembourg, 1471, Luxembourg. Octopus Investments Ltd is authorised and regulated by the Financial Conduct Authority. Issued by Octopus Real Estate. Issued June 2022.