The Aging Population as a Market Catalyst

As lifespans increase and the proportion of older individuals rises, various investment opportunities are emerging, particularly in the realm of retirement living. The sector is expected to experience a compound annual growth rate of 4% until 2030.

Demand for Senior Housing

The oldest baby boomers, nearing the age of 80, are significantly driving the demand for senior housing options such as independent living, assisted living, and nursing facilities. Projections from the National Investment Center for Seniors Housing & Care indicate a need for:

• 200,000 new senior housing units by 2025
• 500,000 additional units by 2028
• 775,000 more units by 2030

Senior Housing Stocks to Watch

UBS identifies two notable real estate investment trusts (REITs) that are well-positioned to benefit from these demographic trends, offering attractive dividend yields.

Ventas

Ventas operates a diverse portfolio that includes senior housing communities, skilled nursing facilities, and medical office buildings, boasting a dividend yield of 2.8%. Analyst Jonathan Woloshin highlights the company’s expansive reach, with 1,400 properties across the U.S., Canada, and the U.K. Following a recovery from the impacts of the COVID-19 pandemic, occupancy levels in senior housing have improved, leading to better pricing and margin efficiencies.

Welltower

Similar to Ventas, Welltower has a broad spectrum of senior housing and outpatient medical properties, comprising over 1,500 facilities in major markets across North America and the U.K. With a current dividend yield around 1.8%, Welltower is praised by UBS analyst Thomas Parmentier for its solid operational footing and advantageous locations that serve as barriers to entry for competitors. The stock has risen 21% this year, reflecting strong occupancy rates and exemplary financial health.